ATLANTA -- Former Marshall University football coach Jim Donnan used his influence to get high-profile college coaches and former players to invest $80 million into a Ponzi scheme, the U.S. Securities and Exchange Commission said Thursday.
Donnan and a business partner convinced investors to put money into a liquidation company that bought and resold appliances and furniture, the SEC said. Donnan and Gregory Crabtree, of Proctorville, Ohio, told investors the business was unique and profitable with huge potential and little risk, said William P. Hicks, associate director of the SEC's Atlanta office.
The pair raised about $80 million from nearly 100 investors, but only about $12 million of that was used to buy merchandise while the remainder was used to pay false returns or was pocketed by Donnan and Crabtree, the SEC said. Donnan also funneled large sums to family members, according to the SEC.
The company, West Virginia-based GLC Limited, promised returns ranging from 50 percent to nearly four times what investors put in. The individual losses ranged from a few thousand dollars to about $4 million, Hicks said.
Donnan's attorney has previously acknowledged the former coach was paid lucrative commissions, but he said Donnan believed he was being paid from legitimate profits.
A lawyer for Donnan did not immediately return a phone call and email Thursday, and an attorney for Crabtree did not return a call.
The SEC said it was seeking to recover the ill-gotten gains as well as undetermined civil penalties against Donnan and Crabtree. Hicks declined to say whether criminal charges would be filed against them.
The FBI office in Atlanta said it wasn't aware of any criminal charges, and the U.S. attorney's office in Atlanta did not immediately respond to an email.
The SEC also wants to recover money it says Donnan gave to two of his adult children and a son-in-law.