Official: Jim Donnan Under Federal Investigation

The United States Securities and Exchange Commission has officially announced it is investigating former Georgia head football coach Jim Donnan for “alleged violations of federal securities fraud.

In a recent court filing in objection to Donnan’s personal bankruptcy court plan to reorganize his family estate, attorney David W. Baddley filed the following statement on behalf of the United States of America:

… the SEC staff anticipates that the SEC will file a substantial claim in this case based on potential remedies for alleged violations of the federal securities laws.

Last year Donnan filed for bankruptcy to protect his personal assets after he was accused by an Ohio company of perpetrating a wide-ranging Ponzi scheme that allegedly bankrupted the company while costing several high profile college coaches and former players millions of dollars in the process.

Donnan’s alleged scam was to lure investors to “loan” money to the Ohio company - GLC Limited - at annual interest rates of up to 70%. GLC has since claimed in its own federal court filings that the ensuing pressure to honor such loans initiated by alleged GLC representative Donnan bankrupted the company.

Think of GLC as Donnan’s own (alleged) piggy bank, with that bank bearing outrageous interest rates - set by Donnan - for his family and friends.

The alleged Ponzi may have also involved Dennis Franchione, Tommy Tuberville and former ESPN announcer and college football coach Mike Gottfried, as Donnan noted in a Jan. 19, 2012, bankruptcy court filing that Franchione, Tuberville and Gottfried “invested and brought in friends whom Jim did not know and had never met.

Jim Donnan alleged Ponzi Scheme: Gillispie lost $1.9 million after alleged Franchione solicitations

(Donnan Handwritten Notes: Franchione “Commission” on Gillispie “Loan”)

One of those “friends” was Billy Gillispie, who “invested” millions in Donnan’s business venture allegedly via Franchione. After failing to recoup $1.9 million in “loans” attributed to Franchione’s alleged solicitations, Gillispie filed a claim for the same amount against Donnan’s family estate in the college football Hall of Famer’s current bankruptcy proceeding.

Donnan’s own handwritten notes, which can be seen in federal bankruptcy court documents, also indicate that Franchione received a substantial “commission” from Donnan - allegedly on behalf of GLC Limited - for luring Gillispie into business deals that may have never actually existed. GLC Limited, the Ohio company Gillispie allegedly “loaned” money to at annual interest rates up to 70%, is also now suing Franchione for $95,000 in “commissions” Franchione allegedly made from the transactions with the Texas Tech basketball coach.

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

This week in federal bankruptcy court Donnan agreed to give the United States Securities and Exchange Commission more time to investigate his alleged Ponzi scheme. Donnan’s concession followed an ominous filing by an attorney for the Securities and Exchange Commission on March 13, 2012, that included the following:

The (Donnan) Disclosure Statement provides that in 2007 – prior to becoming involved with GLC – the Debtors had a net worth in excess of $3 million. (Disclosure Statement at p. 3). It appears that the Debtors’ investments in GLC resulted in net profits of at least $7,352,838 (See footnote 3).

These net returns would have increased the Debtors’ net worth to more than $10 million. The Plan, however, offers less than $5 million in assets for distribution to unsecured creditors, and there is very little information in the Disclosure Statement about what the Debtors did with the substantial profits they received from GLC, and why more money is not available to pay creditor claims.

Failure to Address Possible SEC Claim. The current deadline by which the SEC must file a proof of claim in this case is March 27, 2012 (Docket No. 186).

Although the SEC’s investigation is still ongoing, the SEC staff anticipates that the SEC will file a substantial claim in this case based on
potential remedies for alleged violations of the federal securities laws. The amount sought for disgorgement of ill-gotten gains may likely exceed $13 million, and the claim may also include amounts for civil penalties and prejudgment interest. The Disclosure Statement fails to acknowledge the upcoming bar date or any potential for an SEC claim, including how such a claim would be classified and treated under the Plan.

The U.S. Securities and Exchange Commission and Donnan agreed Thursday to a 60-day extension - which awaits court approval - beyond the aforementioned March 27, 2012 deadline for the Feds to “file a substantial claim” against Donnan.

In other words, the U.S.A.’s investigation and prosecution of Donnan’s alleged Ponzi may just be beginning.

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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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SEC’s Slive and Vanderbilt’s Franklin: Ridin’ Dirty

Wednesday I posted video of a vicious, blindside clip by Vanderbilt offensive lineman Logan Stewart on Georgia defensive lineman Kwame Geathers during UGA’s 33-28 win over the Commodores in Nashville last Saturday.

James Franklin Explains Logan Stewart Clip of Kwame Geathers

Despite Stewart’s dirty play, which included a 10-yard run-up, the Vandy player was given the same, subsequent punishment by SEC Commissioner Mike Slive as Geathers. (Geathers reflexively retaliated with a single punch attempt before walking away from Stewart on his own.)

Each player will miss the first half of his next game - Stewart against Army and Geathers against Florida.

Slive’s unwillingness to issue a more severe punishment to Stewart, who engaged in perpetrating a play that could have easily, and seriously, injured Geathers, is nothing new for the SEC Commissioner but no less indefensible.

Unless of course, you’re Vanderbilt football coach James Franklin.


Wednesday Franklin, like Slive, engaged in an opposite day evaluation of Stewart’s blatantly dirty play:

“I think when you watch the tape, Logan, you can see he was running and he was trying to get his hat across (the front of Geathers’ legs). There was a point where, in my opinion watching the tape, he wasn’t going to be able to get his hat across and he should have pulled off and he didn’t. We explained that to him and we explained that to the rest of the team.”

If I, like Franklin and Slive, had a dirty job that nobody wanted maybe I’d feel the same way.

Photo: An SEC Investigation In Progress (Nick Saban, Mike Slive, Cecil Newton, Mark Emmert)

(How Stuff Works®: An SEC Investigation in progress.)

Nah.

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Intent To Injure Gets Green Light From SEC’s Slive

Today Southeastern Conference Commissioner Mike Slive suspended Vanderbilt center Logan Stewart and Georgia defensive tackle Kwame Geathers for the first halves of their next games.

Logan Stewart Clips Kwame Geathers From Behind

(Video Source: ATLANTA JOURNAL-CONSTITUTION)

The punitive action was a response to an altercation between the two during Georgia’s 33-28 win over Vanderbilt in Nashville on Saturday. From that incident, SEC Commissioner Slive decided that Stewart will miss the first two quarters of Vandy’s game against Army this Saturday and Geathers will do the same in Georgia’s game against Florida in Jacksonville.

While there’s no excusing Geathers for briefly retaliating after Stewart applied a vicious, blindside clip that clearly targeted the knees of the UGA DT, you’d be hard-pressed to find anyone who would’ve reacted any differently than Geathers did.

Stewart’s move to collapse the knees of the towering Georgia defensive lineman with a chop block - following a 10-yard sprint behind the play - certainly indicated an intent to injure on the part of the Vanderbilt offensive lineman. And there’s not a college football player alive who wouldn’t have had the same, reflexive retaliatory reaction as Geathers if they were targeted for such a dangerous, dirty play.

(Watch Stewart give a “thumbs-up” after clipping Geathers)

Stewart knew full well that perpetrating such an act could easily end the football career of Geathers, but he did it anyway. In a blatant, premeditated way.

What kind of message does it send when Slive sentences Geathers to the same amount of sideline time as Stewart?

That if a victim responds to being wronged, no matter how serious the crime, he gets the same sentence as the instigator who tried to injure him.

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Raw Video: Richt Calls UGA Behavior “Horse—-”

Last night - via WSMV-TV in Nashville - I posted video from the postgame, on-field exchange between Vanderbilt Coach James Franklin and Georgia Coach Mark Richt.

(Raw Video Source: WSMV-TV Nasvhille)

During the heated, essentially one-way conversation, Franklin slammed UGA Defensive Coordinator Todd Grantham in attempting to explain the ensuing altercation between the two teams following Georgia’s 33-28 win over the Commodores in Nashville.

WSMV has since released more of the exchange between Franklin and Richt - and Franklin and another Georgia assistant coach.

The video includes subtitles to identify what Franklin and Richt said in real time. Transcript:

Franklin: ”36 [Shawn Williams] comes up, after a tough game, talking — to me!

Richt:Okay.”

Franklin: ”Rubbing our face in it right after the game!

Richt:He’s a dumb—.

Franklin:And then your coach when I tell him about it, then he goes after me and the fight starts.

Richt:That’s what I thought happened, I apologize. It’s horse —- horse —-.”

After complaining to Richt, Franklin then vented his spleen to a Georgia assistant coach:

Franklin: Hey, 36 after a tough game, come over and going to talk —- in my face after the game. That’s not how my guys do it!

While Franklin has a point about the behavior of Williams, if that’s in fact what happened between the Georgia player and Vanderbilt coach, perhaps his enthusiasm for making accusations to the Georgia coaching staff should’ve instead been channeled into avoiding a further altercation by getting his team off the field.

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Did Richt Call UGA Player, Asst Coach ‘Dumbass’?

A postgame scene on the field between Vanderbilt Coach James Franklin and Georgia Defensive Coordinator Todd Grantham last Saturday has led to Grantham being reprimanded by UGA AD Greg McGarity - with the SEC mulling possible punishment for the UGA DC.

(WSMV-TV Nashville: Richt-Franklin video source)

Though videotape of the incident between the two coaches suggests Franklin may deserve at least some blame for instigating the altercation.

Before Grantham admittedly went Dusty Rhodes on Vandy’s main man, Franklin can be seen on video pointing at and shouting in the direction of Georgia football player Shawn Williams  - but only after Williams is 10 yards away with his back turned and Grantham is conveniently within earshot.

With that in mind, a case can be made that Franklin waited to get the attention of Grantham, or any member of the Georgia coaching staff, before the Vandy coach loudly complained about Williams while gesturing in the player’s direction.

Video from a WSMV-TV report in Nashville also showed Franklin throwing Grantham under the bus in his explanation of what happened to Georgia head coach Mark Richt, who actually seemed to sympathize with the opposing coach by responding, “that’s what I thought happened. I apologize.”


And as first noted by Clay Travis of OutkickTheCoverage.com, it sounds like Richt may have also referred to either a Georgia player or Grantham as a “dumbass” as Franklin was describing what allegedly led to the altercation.

So what dastardly act by the Georgia players angered Franklin enough to call out UGA player Williams in front of Grantham?

Franklin told Richt that the Bulldogs were, “rubbing our face in it after the game.”

Glad to see Vandy got their man.

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A Peace Offering To Big Al’s GMC Yukon® Armada

With its trip to Florida Saturday, the 2011 Alabama vacation season is officially underway.


Fitting then that Saturday is one of the two days - every 365 - this Georgia Dawg is behind The Tide. #rtr

Brooks is on Twitter, Facebook and at sportsbybrooks@gmail.com

Crowell Single Demand Changing UGA Gameplan?

Running back Isaiah Crowell was as celebrated a signing as Georgia football coach Mark Richt has experienced since he arrived in Athens.

Mike Bobo and Mark Richt: Are they allowing Crowell to hold UGA offense hostage over jersey number dispute?

(Will Crowell refusal to give up #1 cost speedster Smith offensive touches?)

But if the man charged with mapping UGA’s game plan Saturday against South Carolina is right, Crowell may actually be speeding Richt’s Georgia coaching demise rather than solidifying it.

On Tuesday at his weekly press conference Richt was asked if he planned on using speedy starting UGA cornerback Branden Smith, who played both ways his first two seasons but did not appear on offense last week against Boise State, on offense Saturday against South Carolina. Richt:

“Between Branden Smith and [Brandon] Boykin we do want to continue to use them on offense with Richard [Samuel] and Isaiah [Crowell], and that’s probably going to be the majority of the carries.”

One small detail: Smith, a junior, wears #1, the same number claimed by Crowell when he granted the Bulldogs an intercollegiate audience last February. A team can have two players with the same number, so long as the similar digits remain on opposite sides of the ball. But if Smith and Crowell line up astride on offense, duplicate numerals are not be allowed.

Such numeralogics aren’t lost on Richt, Smith and Crowell - with all three indicating in recent months that the matter would somehow be resolved if offense again was possible for the same Smith who torched South Carolina for a 61-yard touchdown run in 2009.


But on the same day Richt confirmed he hoped “to continue to use” Smith as a two-way weapon, UGA offensive coordinator Mike Bobo on Tuesday flatly maintained that Crowell and Smith would not be appearing on the field at the same time and that there was “no solving” the duplicate jersey number issue between the two. Bobo: Read more…

UGA Gets Proactive About Unsuitable Memorabilia

As the University of Alabama sinks into an ever-widening scandal involving the display of current Alabama football player memorabilia at a Tuscaloosa menswear store, Monday the University of Georgia took a proactive step to slam the gate on such activity.

Georgia changes autograph policy at Fan Day in response to Alabama's Suitgate

(Photo Credit: Jeff Roberts - Birmingham News)

The day after Alabama’s fan day, which featured current Crimson Tide football players signing all manner of UA memorabilia provided by random attendees, UGA released the following statement on its official website:

Due to recent public issues surrounding student-athlete autographs across the country, no outside items may be brought to Picture Day. The Georgia Athletic Association will provide each fan with two free schedule posters to be signed by the players and Coach Richt. No other items will be permitted.

Despite the litany of NCAA violations now confirmed to have happened at T-Town Menswear, Joe Schad recently reported the following in an ESPN.com story titled, “Source: Alabama Found No Wrongdoing“: Read more…

Richt Responds: House Sale ‘Christian motivated’

Early Wednesday I reported that Georgia football coach Mark Richt was selling his $2 million lake house near Georgia’s Lake Hartwell.

Mark Richt Lake House For Sale

Richt was asked about my report later in the day by Chip Towers of the ATLANTA JOURNAL-CONSTITUTION and revealed that the offloading of the pricey property was based in the coach’s Faith. Read more…