Professional Athletes – South Florida Investment Fraud Litigation and Arbitration Attorney

Professional Athletes – South Florida Investment Fraud Litigation and Arbitration Attorney

Securities and Exchange Commission v. Capital Financial Partners, LLC et al., Civil Action No. 15-cv-11447-IT

SEC Obtains Asset Freezes in Ponzi Scheme Involving Loans to Professional Athletes

The Securities and Exchange Commission recently announced fraud charges against a former professional football player and others, alleging they operated a Ponzi scheme that raised more than $31 million from investors who were promised profits from loans to professional athletes.

The SEC’s complaint was unsealed late yesterday after being filed in federal court in Boston on April 1. The court entered asset freezes and other preliminary relief that same day against the defendants.

According to the SEC’s complaint, former professional football player William D. Allen and his business partner Susan C. Daub claimed to make loans to professional athletes who were short of cash. Allen and Daub told investors that they could profit by funding the loans and receiving interest of up to 18 percent paid by the athletes. The complaint alleges that from July 2012 through February 2015, the defendants paid approximately $20 million to investors while receiving a little more than $13 million in loan repayments from athletes. To fill the nearly $7 million gap, Allen and Daub used money from some investors to pay other investors, the hallmark of a Ponzi scheme.

The SEC’s complaint alleges that Allen of Davie, Fla., and Daub, a financial professional formerly of Acton, Mass. who now lives in Coral Springs, Fla, advanced approximately $18 million to athletes while raising more than $31 million from investors. Allen and Daub allegedly misled investors about the terms, circumstances, and even the existence of some of the loans and used some investor funds to pay personal expenses such as charges at casinos and nightclubs, or to fund other business ventures.

The SEC’s complaint alleges that Allen, Daub, Florida-based Capital Financial Partners Enterprises LLC, and Boston-based Capital Financial Partners LLC and Capital Financial Holdings LLC violated federal anti-fraud laws and related SEC anti-fraud rules. In addition to the relief obtained last week, the SEC is seeking a court order to restrain the defendants from violating the same laws and to require them to return their allegedly ill-gotten gains with interest and pay civil monetary penalties.

Four other entities owned or controlled by Allen, Daub, or both are named in the complaint as relief defendants based on their receipt of investor funds. The SEC is seeking to have the entities – WJBA Investments LLC, Insurance Depot of America LLC, Simplified Health Solutions LLC, and Simplified Health Solutions 2 LLC – return their allegedly ill-gotten gains with interest.

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At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.