Donnan was head football coach at Marshall University from 1990 through 1995 and at the University of Georgia from 1996 through 2000 and later became an ESPN analyst.
Among the coaches Donnan helped attract were Texas State football coach Dennis Franchione; Virginia Tech football coach Frank Beamer; ex-Dallas Cowboys coach Barry Switzer and Texas Tech football coach Tommy Tuberville.
Donnan used his influence with former players who looked up to him, federal regulators said. According to the SEC court filing, he told one player, "Your Daddy is going to take care of you," and, "if you weren't my son, I wouldn't be doing this for you," the SEC complaint said. That former player, who was not named, ended up investing $800,000.
In outlining the alleged fraud, the SEC said Crabtree formed GLC in 2004 and began buying and selling liquidated, damaged or returned merchandise. Donnan funded a GLC deal to buy and resell appliances in July 2007 and then began recruiting other investors.
Donnan typically offered investors a chance to provide money for specific "deals" by GLC. When deals were supposedly finished, Donnan often encouraged investors to "rollover" their principal or interest payments into new deals, the SEC said. He told some investors their profits were "guaranteed" and told at least one investor "you can't lose your money; it's already pumping oil."
In late 2009 or early 2010, Crabtree told Donnan that GLC could no longer pay the rates of return Donnan was promising investors. The company began missing interest payments due to investors in August 2010.
Neither Donnan nor Crabtree disclosed GLC's financial problems to new investors. And Donnan, with Crabtree's knowledge, continued raising funds for deals while promising future returns, the SEC said.
Ultimately, a group of investors forced the appointment of a restructuring officer to run GLC. As the officer began to uncover the fraud, Crabtree resigned. In February of last year, the restructuring officer had GLC file a voluntary bankruptcy petition.
Donnan and his wife also filed for bankruptcy, and creditors claimed the Donnans owed them more than $40 million. A federal judge in Georgia approved a settlement in the case last month and, a judge in Ohio, where GLC is being restructured in bankruptcy court, also signed off on the settlement.