Former NFL cornerback WIll Allen last week was accused of setting up a Ponzi scheme. The Securities and Exchange Commission has alleged that Allen duped athletes to the tune of about $32 million.
"According to the SEC, the scheme was in effect from July 2012 to February of this year," the Washington Post noted. "Allen and a partner, Susan Daub, ran a company called Capital Financial Advisers, which took in $31.7 million from investors but paid out only $18 million in loans to professional athletes from the four major U.S. sports."
Allen played for three teams from 2001-2013, most notably the New York Giants. He had 525 tackles and 15 interceptions in his career. His NFL career earnings totaled $26.11 million.
"Sports lending is a unique animal and it is important to keep accurate books to account for off-season periods where it is likely that a player won’t be making principal or interest payments," Leon McKenzie, owner of Sure Sports Lending, told Benzinga.
"Athletes borrowing needs cover the full spectrum of needs of those common for 18-30 year olds along with the needs of the wealthy," McKenzie said. "Unfortunately, some players are 'going broke,' but they rarely qualify for the loans done here at Sure Sports Lending."
McKenzie said his company views loans as contract advances, which typically fill the off-season cash void for items such as:
- Training & living expenses
- Home renovations
- Home purchases
- Auto purchases
- Business ventures
McKenzie said this "is the first time I have heard of a former athlete being investigated for creating or participating in a Ponzi scheme."
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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