Former Miami Dolphins cornerback Will Allen was charged with 23 felonies for defrauding investors on July 15. He ran a company which issued fake loans to professional athletes.
Former Miami Dolphins cornerback Will Allen's days are numbered.
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An indictment issued in Massachusetts last week reveals Allen committed 23 felonies, per a July 15 update from The Palm Beach Post's Jeff Ostrowski.
Ostrowski says the indictment accuses Allen of "12 counts of wire fraud, six counts of aggravated identity theft, one count of conspiracy to commit wire fraud and four counts of illegal monetary transactions."
The Palm Beach Post update says Allen could be imprisoned for 20 years for each for the wire-fraud felony. The other felonies require a shorter sentence.
Ostrowski reported on Wednesday that Allen pleaded not guilty.
He ran a company, Capital Financial Parners, which issued high-interest, short-term loans to pro athletes. He relied on investors to fund the said loans, which turned out to be fake, per Ostrowski.
Of these fake loans, three were given to football players and two to baseball players. He allegedly used the profit he made from his investors for other expenses, per The Palm Beach Post.
Allen issued a sixth and legitimate loan to Columbus Blue Jackets defenseman Jack Johnson which he allegedly inflated. In the indictment, Allen claimed he loaned Johnson $5.65 million when in fact he issued only $3.4 million, per Ostrowski.
Johnson filed for bankruptcy last year, per The Palm Beach Post.
Ostrowski goes on to say the FBI traced the fraudulent proceeds to Allen, who collected $4.1 million for his personal funds. An estimated $61,080 went to Allen's casino accounts.
Allen had an accomplice, Susan Daub, who got $239,000. She is charged with 20 felonies and also pleaded not guilty, per The Palm Beach Post.
The Securities and Exchange Commission charged Allen and his accomplices with fraud last April for a Ponzi scheme "that raised more than $31 million from investors who were promised profits from loans to professional athletes."
Allen and Daub allegedly told their investors they could earn as much as 18 percent interest on loans their company gave to pro athletes. The SEC specifies the period from July 2012 to Feb. 2015 when the investors gave $20 million to the company, which received just $13 million in loan repayments from its clients.
Allen and Daub "used money from some investors to pay other investors, the hallmark of a Ponzi scheme," per SEC.
The two then advanced $18 million to their athlete-clients while "raising more than $31 million from investors," per the SEC update.
Furthermore, they allegedly misled their investors regarding the details of the loans. According to the SEC, Allen and Daub even used some of the investor funds for their casino, night club and business venture expenses.
SEC's Boston Regional Office director Paul G. Levenson described how Allen and Daub dealt with their investors, per SEC.gov:
"The defendants sold investors on the idea of lending money to pro athletes, but we allege that's not where a large portion of the investors' money went. As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies."
When Allen played for the Dolphins in 2010, he borrowed a loan from Pro Player Funding LLC for $505,000 with an annual interest of 34 percent. The company claims Allen defaulted, not paying the $88,262.78 due on Dec. 15, 2010, per an April 2015 update from Ostrowski.
Three months later, Pro Player Funding LLC "won a judgment of $576,066.64 from Allen," per The Palm Beach Post.
Allen then started Capital Financial Partners in 2012, per Ostrowski.
Allen recorded 455 tackles, 5.0 sacks and 15 interceptions in 140 career regular-season games for the New York Giants and Miami Dolphins, per Pro-Football-Reference.com.
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