Late last week, ESPN's "Outside The Lines" examined the news that former Georgia football coach and ex-ESPN analyst Jim Donnan may have been involved in a Ponzi scheme run by a West Virginia-based retail liquidation company called GLC Enterprises. If that sounds shady, well, it allegedly is:
Federal bankruptcy documents filed last month allege that Donnan "solicited investments from more than 50 individuals and entities to GLC Enterprises" and made commissions ranging from 15 percent to 20 percent for any investments he solicited. Donnan and his family members made more than $14.5 million from GLC in the form of "approximately 293 transfers," according to the court documents.
According to the court filings, those individuals and entities included high-profile football coaches such as Barry Switzer, Frank Beamer and Tommy Tuberville. But football coaches weren't the only ones who allegedly gave their money away. According to bankruptcy court documents obtained by the Charlotte Observer, that list also includes new NC State coach Mark Gottfried, who invested $250,000 with the company. Yikes.
The good news? Gottfried made the investments before he was hired by the Wolfpack. He's not named as a defendant in the suit, nor is he accused of any wrongdoing.
The case is unrelated to the still-brewing David Salinas scandal, but it is of the same type. Salinas, a prominent figure in Houston AAU hoops, committed suicide in July after the SEC opened an investigation into his investment fund, J. David Financial Group. Dozens of prominent college hoops coaches invested their money with Salinas, and following the revelations, many in the public wondered if the investments served as a point of access for coaches to players in Salinas's AAU organization. In short, it's a mess.
Which brings us back to the original point: Why do college coaches seem so prone to Ponzi schemes? Is it outsized trust? A too-wide circle of hangers-on, agents, runners and money men? What is it about the profession that seems to encourage coaches to eschew safer places for their money -- banks, mattresses, a bunker filled with gold bullion and canned goods -- and instead place it into the hands of random investment funds and retail liquidation companies?
Anyone can be duped by a schemer, of course. Some sympathy is warranted here. But fellas, please, if you're that desperate for a place to put your money, hire an accountant. Just please stop giving your money to guys with shady investment opportunities. Deal?