Former Giants and Dolphins Player Will Allen Charged With Fraud for Allegedly Operating Ponzi Scheme

Will Allen, the former safety for the New York Giants, has been charged by the Securities and Exchange Commission with fraud, according to the Wall Street Journal.

Allen was the Giants’ first round pick in 2001, and played primarily for the Giants and Dolphins, ending his career with New England for one season (in which he did not play in 2012). (And he should not be confused with the Will Allen that has played for the Pittsburgh Steelers, Dallas Cowboys, and Tampa Bay Buccaneers).

The SEC alleges that Allen and an associate ran a Ponzi scheme where they used payments from other investors to re-pay original investors. The original business pitch–which may be of interest to the NFL, MLB, NHL, and NBA and may have embroiled several players around the leagues–was that the investment was to provide high-interest loans to athletes that would be re-paid.

"From July 2012 to February 2015, Mr. Allen and Ms. Daub paid about $20 million to investors while receiving a little more than $13 million in loan repayments from athletes, according to the complaint. To fill the nearly $7 million gap, the pair used money from investors to pay other investors. The SEC alleges that Mr. Allen of Davie, Fla., and Ms. Daub, who lives in Coral Springs, Fla., advanced about $18 million to athletes while raising more than $31 million from investors. The SEC said Mr. Allen and Ms. Daub misled investors about the loans and used some investor money to pay personal expenses such as charges at casinos and nightclubs."

Doing the quick math, that would mean that the athletes who were given $18 million in loans collectively only paid back $13 million, and then on top of that, it is alleged that Allen and Daub used even more of the money on living it up.