(Reuters) - A former NFL veteran has been charged with running a Ponzi scheme that allegedly enticed investors to back loans for professional athletes, federal securities regulators said Tuesday.
Will D. Allen, 36, who played with the New York Giants, Miami Dolphins and New England Patriots before retiring in 2013, is accused of raising more than $31 million from investors.
Allen and business partner Susan Daub claimed to make loans to professional athletes who needed money, the Securities and Exchange Commission alleged in a complaint.
The SEC said the pair told investors that they could profit by financing the loans and receiving interest of up to 18 percent paid by the athletes.
Allen and Daub paid about $20 million to investors from July 2012 through February 2015 while receiving a little more than $13 million in loan repayments from the athletes, the SEC said.
To fill the gap, they are accused of illegally using money from some investors to pay other investors.
"As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies," Paul Levenson, director of the SEC's Boston Regional Office, said in a statement.
Allen, who co-founded Capital Financial Partners and two related entities, lives in Davie, Florida. Daub, 54, a financial professional formerly of Acton, Massachusetts, now lives in Coral Springs, Florida.
A former first round pick of the 2001 National Football League Draft, Allen, a defensive back, played five years with the Giants and five with the Dolphins. In March 2012, he was signed by the Patriots but was placed on injured reserve that August and retired in March 2013.