Former College Football Coach Accused of Running a Ponzi Scheme

Federal regulators have accused a Hall of Fame college football coach of running a Ponzi scheme that defrauded fellow coaches and his former players.

Jim Donnan, a head coach of both Marshall University and the University of Georgia during the 1990s who later became a broadcaster on ESPN, is accused of teaming up with an Ohio businessman to cheat investors out of $80 million.

The Securities and Exchange Commission filed a civil lawsuit in Federal District Court in Atlanta on Thursday seeking to recover the ill-gotten gains and impose a penalty on Mr. Donnan, who lives in Athens, Ga., and his Cincinnati-based partner, Gregory L. Crabtree.

Victims of Mr. Donnan's supposed Ponzi scheme includes Barry Switzer, the former Dallas Cowboys coach; Kendrell Bell, the former Pittsburgh Steelers linebacker who played for Mr. Donnan at Georgia; and Billy Gillispie, the former University of Kentucky basketball coach, according to court filings.

Mr. Donnan, 67, r aised money from about 100 investors for a company called GLC Limited, a liquidation business that purportedly acquired leftover merchandise from large retailers and resold them to discount stores at a profit. He promised investors returns of between 50 percent and 380 percent.

Among his investors were former players, said the S.E.C. He told one unnamed player, according to the complaint, “Your Daddy is going to take care of you” and “if you weren't my son, I wouldn't be doing this for you.” The player later invested $800,000.

What he was doing, regulators say, is stealing from him. Of the $80 million raised, only $12 million was used to purchase merchandise, with balance used to pay earlier investors in the scheme, the S.E.C. said. Mr. Donnan took $7.4 million for himself, according to the lawsuit.

“Donnan and Crabtree convinced investors to pour millions of dollars into a purportedly unique and profitable business with huge potential and little risk,” said William P. Hicks, associate director the S.E.C.'s Atlanta office, in a statement. “But they were merely pulling an old page out of the Ponzi scheme playbook, and the clock eventually ran out.”

Last December, after the business unraveled, Mr. Donnan and his wife sought bankruptcy protection after investors went to court demanding millions of dollars from them. Mr. Crabtree and his wife also filed for bankruptcy.

Mr. Donnan is well-known in the football-crazed states of Georgia and West Virginia. In 1992, his team at Marshall, which is in located Huntington, West Virginia, won a Division I-AA national championship. Mr. Donnan went on to coach for five seasons at the University of Georgia, one of the country's most powerful college football programs, before being fired in 2000.

Neither Edward D. Tolley, a lawyer for Mr. Donnan, nor Michael Schmidt, a lawyer for Mr. Crabtree, immediately returned a telephone call seeking comment.

During a call with the media on Thursday, the S.E.C. declined to comment on whether federal prosecutors were investigating the case.