Blotter: September 2012

Blotter: September 2012

Fumbled Investment

A former ESPN commentator and college football Hall of Fame coach and his colleague defrauded 97 investors in an $80 million Ponzi scheme, the SEC said. The ex-coach, James M. Donnan III of Athens, Ga., and Gregory L. Crabtree of Proctorville, Ohio, offered and sold high-yielding, short-term investments in GLC Limited, a West Virginia business, between August 2007 and mid-October 2010. Many of the investors were solicited by Donnan using contacts he made as a commentator and as the head coach at Marshall University and the University of Georgia; a number of investors were former players or coaches. Donnan exploited close relationships with former players, the SEC said; in one case, he told a player, “Your daddy is going to take care of you.” The player put in $800,000, the SEC said. Donnan and Crabtree told victims that their money was being used to buy discontinued, damaged, or returned products from large retailers that would later be sold to discount retailers. The SEC said that only about $12 million was spent on merchandise, while the rest was used to pay fake returns to earlier investors, or was stolen by Donnan and Crabtree.

Ungodly Advice

The SEC and the U.S. Justice Department accused a Puerto Rico resident and his company of targeting evangelical Christians and factory workers in a Ponzi scheme that promised returns of up to 50 percent in a commodities investment. The SEC said Ricardo Bonilla Rojas and his firm, Shadai Yire, raised at least $7 million from up to 200 investors in Puerto Rico, Florida, New York, and North Carolina. Investors were misled into thinking their principal was “100% guaranteed;” the SEC said Rojas never invested any money but used new contributions to repay earlier investors, and kept $700,000 for himself. Phony investment statements were created to convince clients that their money was growing.


The SEC charged three men in a boiler room scheme that the agency said raised up to $5.7 million from 150 investors via the sale of fraudulent securities from December 2006 to August 2009. Edward M. Laborio of Boca Raton, Fla., Jonathan Fraiman of Lantana, Fla., and Matthew K. Lazar of Westerville, Ohio lied to and misled investors about the securities in the Envit Companies; their sales pitch scripts included unfounded claims that investors would receive quarterly dividends and “2-3x return on money,” the SEC said. Laborio, who led the scheme, used proceeds to cover gambling losses, to make direct payments to himself, and to cover personal expenses.

TAGS: Industry
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