Gillispie to Donnan: Gimme Back My $1,913,167.00

Last August SbB reported that a West Virginia-based company, Global Liquidation Center Ltd. (GLC), had accused former Georgia and Marshall head football coach Jim Donnan of running a Ponzi scheme that eventually bankrupted the company.

Billy Gillispie asks for $1.9 million back from Jim Donnan

(Donnan on BCG’s $1.9MM claim: Pound Sand)

The civil action filed by GLC in a federal bankruptcy court last year was the first in what’s turned out to be a race by dozens of claimants to obtain what’s left of Donnan’s dwindling personal estate. After GLC filed for Chapter 11, Donnan quickly filed for bankruptcy himelf to protect around $5 million in assets from GLC and innumerable alleged Ponzi victims - including many sports celebrities.

From federal court exhibits posted by SbB seven months ago - which included fairly indecipherable and oft-incoherent handwritten notes from the former football coach -  here’s how Donnan’s Ponzi (allegedly) worked:

(Barry Switzer was sports acquaintance prey for (alleged) Donnan Ponzi)

1) Allegedly presenting himself as representative of GLC, Donnan would solicit “loans” from friends and sports celebs like Tommy Tuberville, Frank Beamer, Mark Gottfried and recruiting analyst Tom Luginbill with the promise of annualized returns of up to 70%. Donnan’s pitch was to tell alleged victims that their money was going to purchase surplus retail items that would eventually be resold. (Funding GLC’s business model/operation.)

2) Donnan allegedly enlisted Dennis Franchione to solicit multiple alleged Ponzi investors, including Billy Gillispie. In a separate legal action, GLC is now pursuing $95,000 in alleged commissions the current Texas State head football coach was allegedly paid by Donnan for luring Gillispie into the alleged scheme.

Court Docs: Franchione made $95,000 on Gillispie Ponzi buy-ins

3) After receiving the money allegedly solicited by Donnan and Franchione, GLC would pay out exorbitant fees to Donnan and Franchione for their “services” - along with sky-high loan interest rate payments to Donnan’s investors. Donnan and Franchione themselves also “invested” in the company with the expectation they’d recoup as much as 70% of their loan principal in 12 months.

More pertinent details:

  • Federal court docs submitted by GLC in its initial BK filing indicated that Donnan helped secure $81,916,000 from investors.
  • During the same period, GLC alleged that Donnan billed the company $14,557,228.50 in personal loan interest and commissions.
  • Of the $82 million in investor funds solicited by Donnan, GLC reported that $11,793,000 was invested in company operations.
  • Who exactly helped Donnan perpetrate his alleged Ponzi from within the company is subject to an ongoing investigation that could eventually see GLC executives and/or Donnan and/or Franchione charged in criminal court.

The highest-profile loser in Donnan’s alleged scheme, according to multiple court document filings, was/is Billy Gillispie.

On Oct. 24, 2011, Gillispie filed a claim against Donnan in federal bankruptcy court over $1,913,167.00 the Texas Tech basketball coach “loaned” to Donnan to invest in GLC company operations. In one loan document signed by the two parties and filed in federal bankruptcy court last year, Gillispie was to receive an annual 60% interest rate on a principal of $1,000,000 paid to GLC via Donnan.

In Donnan’s own handwritten notes - appearing in court docs - the ex-coach also noted that Franchione was to be paid a five percent commission for allegedly luring Gillispie into that particular deal. (Which GLC represenatives are now pursuing from the Texas State coach.)

In another federal court document, it appeared that Donnan and a GLC official drew up a $2,000,000 “loan” from Gillispie to GLC at “65 percent interest per year.

Gillispie though did not sign that agreement.

Gillispie’s initial claim was completely rebuffed by Donnan in a November 18, 2011, legal response. Two months later, Gillispie’s lawyer specifically alleged to the judge that Donnan misrepresented a Ponzi scheme as a legit business endeavor to his client, punctuating a lengthy court filing rife with legal citations by asking that …

the Court set a discovery deadline in this matter and a final hearing if deemed appropriate, and that it grant Claimants such other and further relief deemed to be just and proper.

A Jan. 25, 2012, hearing was subsequently set for possible disposition of Gillispie’s $1.9 million claim. Though that was just one of  36(!) other claims against Donnan scheduled for the same day. Because so many remain steadfast in their uncompromisig pursuit of the ex-Georgia football coach, the backed-up Athens, Georgia, federal court continued all civil proceedings until March 20, 2012.

And with remarkably few settlements in sight for the remaining claimants against Donnan, federal criminal investigators attempting to crack the case best pack a retard sandwich too.

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Did Franchione Lure Gillispie Into Donnan Ponzi?

Last month a West Virginia-based company, Global Liquidation Center Ltd. (GLC), accused former Georgia football coach Jim Donnan of running a Ponzi scheme that it claimed eventually bankrupted the company.

Jim Donnan lured Tommy Tuberville, Frank Beamer, Billy Gillispie and Dennis Franchione into his alleged Ponzi scheme

In a civil action filed in a federal bankruptcy court last month in Athens, Georgia, GLC alleged Donnan had committed fiduciary fraud, embezzlement and larceny in the company’s bid to obtain the $5 million remaining in Donnan’s personal estate. (Donnan filed for bankruptcy himelf after GLC declared Chapter 11.)

GLC alleges that Donnan, who was a major investor in the retail outlet liquidation company, used his formal role with the company to lure investors into loaning money to GLC at exorbitant interest rates. (Some documented agreements touted a 70 percent annual rate of return.) When GLC was unable to service its obligations to the Donnan investors who had loaned it money - and Donnan himself was unable to obtain fresh investment capital to help GLC service those loans - the company was forced into declaring bankruptcy.

In federal court documents the company reported that from 2007 to 2010 Donnan helped secure $81,916,000 from investors. During the same period, GLC alleges that Donnan billed the company $14,557,228.50 in his own personal loan interest and commissions - with much of that money transferred from Donnan to his immediate family members and wife.

Of the over $81M in investment funds, GLC reported in court documents that $11,793,000 was invested in company operations.

As part of its legal argument to obtain what’s left of Donnan’s personal estate, GLC noted in its filing last month:

James Donnan is substantially, if not principally, responsible for the initiation and operation of a far-reaching ponzi scheme that defrauded GLC and its investors of approximately $27,752,159.

A week after GLC filed its claim against Donnan, a federal bankruptcy court judge effectively froze his personal assets to allow for a formal, legal examination of the hundreds of pages of evidence and exhibits submitted to the federal court.

As for GLC’s Donnan-solicited investors, nowhere in those legal documents is an itemized accounting of who lost what. And from Donnan’s personal accounting practices, it isn’t unreasonable to think that he doesn’t know either.

From evidence presented by GLC to the court, it’s now been confirmed that the former football coach kept virtually all of his financial accounting in handwritten notes. Those notes give the only clues, for now, of how much individuals may have invested - and potentially lost - with Donnan.

Documents in Donnan’s handwriting submitted by GLC to the federal bankruptcy court indicate Texas Tech basketball coach Billy Gillispie gave Donnan at least $3 million - in separate payments - to “loan” to GLC at exorbitant annual interest rates.

Dennis Franchione made commission on Gillispie $1,000,000 payment to Donnan

In one of the payments to Donnan, Gillispie signed off on a GLC company document indicating a $1 million loan to GLC at a 60 percent annual interest rate. Donnan later noted in one of his handwritten accounting documents that current Texas State football coach Dennis Franchione was to be paid five percent of Gillispie’s seven-figure buy-in. ($12,500.)

Donnan, Franchione and Gillispie part of alleged Ponzi scheme

(Franchione’s $300,000 ‘loan’ to Donnan at 60% annual rate)

In another GLC loan agreement document, Gillispie was given a 65 percent annual interest rate in exchange for a $2 million loan - solicited by Donnan - to the company. (Though that document was not signed by Gillispie.)

In another federal court document submitted by GLC last month, Donnan’s handwriting shows Franchione as credited with a 10% commission on what appears to be a May 1 six figure payment from Gillispie to GLC via Donnan.

Donnan, Franchione and Gillispie part of alleged Ponzi scheme

Franchione is prominently featured throughout Donnan’s handwritten bookkeeping of “investor” information. Here’s a handwritten contract for a Franchione “loan” signed off on by Donnan and his wife Mary.

Jim Donnan Contract With Dennis Franchione

In a March 10, 2009, email to Donnan, Franchione directed the former Georgia coach to send him the payments for five other individuals who had also apparently “loaned” Donnan - and GLC - money.

Dennis Franchione received checks for several Donnan clients

Franchione wrote Donnan at the time:

The others can be done in checks mailed to me in their names and I’ll see that they get there.

Franchione and Gillispie were far from the only coaches and sports figures who, according to Donnan’s handwritten notes, loaned him large sums of money at staggering interest rates.

Interest rates that GLC, a small retail merchandise liquidation firm, was obligated to pay.

Here’s some of the sports figures listed in Donnan’s somewhat indecipherable handwritten notes - and what they may have paid the former coach. (At least based on Donnan’s primitive accounting practices.):

1) Tommy Tuberville: $800,000
2) Frank Beamer: $175,000
3) Billy Gillispie: $3,000,000+ (one of two loan agreements unsigned)
4) Dennis Franchione: $650,000
5) Mark Gottfried: $250,000
6) Kendrell Bell (Former NFL player): $2,075,000 (two of four loan agreements unsigned)
7) Jonas Jennings (Former NFL player): $500,000 (loan agreement unsigned)
8) Mike Gottfried (Former ESPN analyst, CFB coach): $250,000
9) Tom Luginbill (ESPN recrutiing analyst): $30,000
10) Barry Switzer: $50,000

Barry Switzer Gave Jim Donnan $50,000 In Ponzi Scheme

Here are some of the executed and non-executed “loan” agreements and more handwritten notes - this time from a Donnan associate:

Jim Donnan Loan Agreements

Not everyone was convinced of the veracity of Donnan’s business. GLC included in its federal court document dump one email exchange between Donnan, a potential Donnan investor and his investment advisor:

When dismissing one of Donnan’s claims to his client, the advisor wrote in an email, “someone’s been eating retard sandwiches.”

Brooks is on Twitter and Facebook

Friday Tonic: Beamer’s Classy Act For BC Player

It’s been quite the week for battling college players, as anyone in the general vicinity of the University of Kansas can attest. But how can we leave you on a Friday with images of Mark Mangino angrily spanking his players with a spatula? It wouldn’t be right. Let’s shift our gaze to the rolling hills of Virginia, where something much more uplifting is going on.

Frank Beamer, Mark Herzlich

Virginia Tech is playing host to Miami in what might be considered a rather important ACC tussle on Saturday. And among the items for purchase at the university bookstore in Blacksburg, besides these, will be wristbands for $1, with the proceeds going to a very special cause. It’s all Frank Beamer’s idea, and it’s a pretty classy move on the part of the Hokies head coach. Read more…

Speed Read: Newspaper Carnage Only Beginning

The meltdown of the American newspaper industry is in full effect. The past six weeks have seen the closures of the Seattle Post-Intelligencer and the Rocky Mountain News, marking two of the largest newspaper closures in recent memory. And yesterday came news that might be a sign of disaster for one of the nation’s leading newspapers: the SAN FRANCISCO BUSINESS TIMES reports that roughly 120 employees of the San Francisco Chronicle have accepted voluntary buyouts as the paper struggles to avoid sale or shutdown.

San Francisco Chronicle

According to a list from the SAN FRANCISCO PENINSULA PRESS CLUB, those leaving the paper include NFL writer Nancy Gay, college sports writer Jake Curtis, deputy sports editor Larry Yant and a host of other writers, editors and photographers. This should be taken as a giant red flag if these people are getting out now, especially someone as respected as Gay; trust me, people just don’t leave NFL reporting positions at major newspapers unless something is going terribly, horribly wrong.

Leaving the Chronicle

But even the voluntary exits might not be enough - parent company Hearst Corporation (which also owns the now-online only Post-Intelligencer) has said that it needed to cut “at least” 150 jobs to avoid a shutdown or sale, with the paper currently bleeding money at a rate of $1 million a week. And with the chances of a corporation wanting to buy a failing newspaper next to zero in this climate, it seems as though the only two options are to slash the staff to ribbons or close shop.

As bad as the first option sounds, the alternative is even more daunting. Especially when you consider that the San Jose Mercury News recently announced that it was essentially abandoning the San Francisco market by stopping all weekday deliveries to the city.  Which leaves a very real possibility that the nation’s 12th-largest metropolitan area could be without a major daily newspaper (the San Francisco Examiner, currently having been reduced to a free handout resembling The Pennysaver, doesn’t count).

It seems like Mark Cuban might be prescient when he blogged about the slow death of the newspaper sports section; let’s hope that his idea of teams and leagues banding together to provide beat reporters to cover the same teams and leagues doesn’t pan out, but if the San Francisco Chronicle can fold, is any idea that outlandish?

And don’t think that it will just stop with the Chronicle: the paper was only sixth in TIME’s recent list of “The 10 Most Endangered Newspapers in America”. Ahead of it on the list are papers such as the Boston Globe, Minneapolis Star-Tribune and the Miami Herald. That’s a lot of major sports teams that are suddenly going to be underserviced by local media, if at all.

Tim Floyd

Also possibly endangered: the continued success of the USC men’s basketball program. After making the NCAA Tournament for the third straight season for the first time in school history, the Trojans might be going back to square one as ESPN has word that an Arizona radio station is reporting that Tim Floyd has agreed to become the Arizona Wildcats’ new head coach, with an announcement as early as today.

This is all speculation, and as the LOS ANGELES DAILY NEWS notes, this radio station has recently also had Rick Pitino and Jeff Capel as taking over at Arizona, so take everything with a grain of salt. But the LOS ANGELES TIMES reports that there may be smoke to this fire: Floyd apparently flew out yesterday to Tucson and was given 24 hours to decide on accepting the position by Arizona AD Jim Livengood.

Which is all very interesting, since Floyd rejected an overture by LSU last year, saying that USC was “his last job.” Then there’s the matter of the “impassioned speech” he gave at the team banquet Wednesday night, imploring players such as Taj Gibson and DeMar DeRozan to not jump to the NBA and come back next season to help the Trojans make a run at a national title. And then he got on a plane the next morning to interview for the Arizona job. That’s venturing into Bobby Petrino level of sleaziness.

Diego Maradona

Finally, a busy night of World Cup soccer qualifying has also brought us two people to add to the endangered list. The first is Argentine legend Diego Maradona, whose own near-death experiences with drugs and weight made him frequently endangered in the past. But this time, it’s not his life that’s in danger but his managing career, after his Argentina squad was demolished 6-1 by lowly Bolivia.

How embarrassing is this? It’s the first time they’ve given up six goals in a game since the World Cup…in 1958. Bolivia is 50 places behind Argentina in the FIFA world rankings, and their hat trick hero was Joaquin Botero, who plays for a second-division team in Mexico. This is Chaminade beating Virginia type stuff, where you glance at the box score over and over to make sure you didn’t read it wrong, before convincing yourself it’s just a typo.

And speaking of Mexico…if I were embattled manager Sven-Goren Eriksson, I wouldn’t even bother making the team flight back from Honduras, where his team suffered a humiliating 3-1 defeat, unless he wants his severed head to be placed on a pike outside of Atzeca Stadium as a warning to future managers.

The win allowed Honduras to leapfrog Mexico into the third and final guaranteed CONCACAF berth in the 2010 World Cup. Although there’s a lot of games left in both North & Central American and South American qualifying, there’s a chance that Argentina and Mexico could wind up facing each other in a two-game playoff, with the winner getting a World Cup spot and the loser staying home.

Other sports stories you might have missed last night as you were going to the hospital ER in Texas again…and again…and again

  • This is not going to help Wisconsin out in recruiting at all: the DAILY CARDINAL reports that the Badgers have banned ESPN’s Erin Andrews from working as a sideline reporter during games in Madison because she’s too much of a “distraction.” Unless this is a particularly clever April Fool’s joke…which it is.
  • Erin Andrews

  • Remember when Pete Carroll acted petulant at Mark Sanchez’s press conference announcing he was turning pro? Scouts at USC’s Pro Day tell the LOS ANGELES TIMES that Carroll is now claiming he acted that way to “test” Sanchez’s resolve to turn pro. Because acting like a spoiled child is going to convince him to come back.
  • It’s not just American athletes who get into trouble at strip bars late at night: THE MIRROR has word that Sunderland and French international striker Djibril Cissé has been arrested after allegedly grabbing a woman by the throat at a late-night strip club. You might remember him for having the distinction of suffering horrific, Theisman-like leg breaks not once but twice in his career, which you can watch here and here. (Warning: not for the faint of heart.)
  • Give Sen. John McCain credit for doing something right: the DALLAS MORNING-NEWS says that the former Presidential candidate is lobbying for a posthumous pardon of old-timey boxing champ Jack Johnson for trumped up, racially-biased charges. It still won’t make me forget that McCain voted against Martin Luther King Day, but it’s a start.
  • A word of warning: don’t take a quick paycheck to record canned introductions to videos for a company you know nothing about. Greg Gumbel failed to heed this advice, and he wound up as the spokesperson for a time-share, which ONLINE SPORTS GUYS says has lead to a lawsuit. Here’s one video in question:

  • SI.COM says that the Hockey Hall of Fame has changed its rules, opening the door for the first female player to be voted in. Someone in Canada, Don Cherry is burning his plaid Depends adult diapers in protest.
  • Hey look, another lacrosse team has been forced to suspend their season because of alleged misconduct. But the story of the Curry College team is far different than Duke, according to the BOSTON HERALD. Team members allegedly hazed new players at a party, although even the freshmen “victims” seem to think it was no big deal. Remind me to bring a lawyer if I ever go to a college lacrosse party.
  • WSLS-TV says that Virginia Tech coach Frank Beamer prepared for the upcoming season by doing some NASCAR racing. He didn’t do so hot, but his goiter was signed to a developmental deal with Joe Gibbs Racing.
  • Somehow former Cleveland Browns QB Bernie Kosar is being dragged into the Rod Blagojevich mess. RUMORS AND RANTS reports that Kosar was on some sort of fundraising “hit list” put together by the then-Illinois Governor with the Steve Garvey haircut just before he was arrested.
  • The Boston Celtics barely avoided another humiliating defeat to the Charlotte Bobcats, as the BOSTON GLOBE reports that Ray Allen’s three-pointer at the end of OT gave them a 114-106 victory.

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Frank Beamer Takes A Punch Like Don Flamenco

Admit it - you’ve wanted to punch Frank Beamer in the face before. In this day and age, how high and mighty do you have to be to stay with the same school for 22 years? And just who does he think he is, winning his third ACC championship in his fifth season in the conference?

Frank Beamer

That’s redshirt senior Cory Holt with the strong right hook in an attempt to keep Beamer grounded. And lest you think it didn’t hurt that badly, Holt is the team’s third-string QB, so the arm strength is there. Thank God he didn’t accidentally lance Beamer’s goiter, otherwise the entire sideline would have been showered in something other than Gatorade. (Video after the jump.) Read more…

Drunk Virginia Tech WR Blames Beamer For Arrest

When Virginia Tech wide receiver Ike Whitaker got busted for public intoxication last Friday after blowing a .33 on the ol’ Blood Alcohol Meter, he did what any reasonable young collegiate athlete would do: He blamed his coach.

Frank Beamer

(Beamer, picking out the next life he wants to ruin)

Apparently, Whitaker blames his drunken escapade on the fact that he was self-medicating after Frank Beamer suspended him for missing a morning practice. Beamer suggested that Whitaker transfer to another school if he wanted to play during his final year of eligibility, but Whitaker should make no mistake about, he wouldn’t be played for the Hokies again that year.

In response, Whitaker turned back to the bottle.

Read more…

E. Carolina Beats Virginia Tech With Beamer Ball

Lost in the hoopla: it was a member of the Holtz family engineering the upset. East Carolina coach Skip Holtz put together a coherent, spittle-free gameplan that would give his father, Lou, great pride. Some would dispute that East Carolina’s victory is a true upset since a good chunk of the Hokies’ offense is generated from its special teams and defense. Regardless, the Hokies were defeated by a lesser foe on a glorious opening Saturday for college football.

The game-changing play was a Beamer-esque blocked punt and touchdown return with under a minute remaining that gave the arrrrrrrrr Pirates the 27-22 lead. Virginia Tech never answered in its final possession. The Hokies’ 16-car-collision of a wreck mismanagement of its quarterbacks is being blamed. Read more…

Kansas Coach Mark Mangino Named Home Depot Coach of the Year

KU’S MANGINO GORGING ON COACH OF THE YEAR HONORS: Our massive man Mark has done it again. After leading the Jayhawks to an 11-1 record and a trip to the Orange Bowl, king-size Kansas coach Mangino has been named the Home Depot Coach of Year:

Mark Mangino coach of the year award

The KANSAS CITY STAR grabbed a front-row seat at ESPNU’s 2007 College Football Awards Show down in Disney World Thursday night. In addition to Mangino’s hardware, the Jayhawks football team was honored with the Stanley Tools Breakthrough Of The Year Award.Home Depot? Stanley Tools? Now the team can start on Memorial Stadium renovations when they get back to Lawrence.

Mark Mangino Frank Beamer

Mangino is also licking his chops as one of the eight finalists for the Eddie Robinson Coach of the Year Award. His competition includes Virginia Tech leader and Orange Bowl nemesis Frank Beamer.And now the Hokies have bulletin board material before their Miami showdown. During the awards show, Kansas OT Anthony Collins remarked, “We’re an up-and-coming team. We’re 11-1, soon to be 12-1, and we need all the recruits we can get so we can get to the national championship.”

Mark Mangino

Dolphin Stadium is sure to be Rockin’, Chalkin’ & Jayhawkin’ with a Hokie Hokie High come January 3rd.

Hawaii Gets First-Place Vote In Final Regular Season Coaches Poll

POLL NO LONGER MUM(ME) ABOUT WHO VOTED HAWAII #1: Tony Barnhart of the ATLANTA JOURNAL-CONSTITUTION found some fun tidbits in the final coaches poll of the 2007 college football regular season:

Hawaii football sign

Most interesting was a first-place vote given to Hawaii, who needed a last-minute touchdown and last-second interception to defeat a 4-8 Washington at home late Saturday night.The undefeated and Sugar Bowl-bound Warriors were at the top of the list of Hal Mumme, head coach at fellow WAC member New Mexico State.

Mark Richt Les Miles

Meanwhile, some coaches were staying true to their school. LSU’s Les Miles and Oklahoma’s Bob Stoops each voted their own team #1, while Virginia Tech’s Frank Beamer and Georgia’s Mark Richt each had their squads at #2 - with Richt putting his Bulldogs ahead of LSU.Like Mumme, Big Ten coaches also kept solidarity with their conference, as all seven that vote in the poll had Ohio State ranked #1 - even Michigan’s Lloyd Carr.

Lloyd Carr yelling

Need some further help in deciphering the poll madness? The site POLLSPEAK attempts to rationalize some of the thinking by coaches, columnists and computers about who ranks where. They even nominate which casted ballots make the most sense & most nonsense.Such as voting Hawaii #1.