On Tuesday, the Securities and Exchange Commission filed a lawsuit against former NFL cornerback Will Allen, alleging that he helped run a Ponzi scheme that collected $31.7 million from investors but paid out just $18 million in loans.
According to SEC, there was an NHL player mixed up in all of this. Let’s see … people getting betting bilked out of millions … NHL player involved … yes, that’s the sad ballad of Jack Johnson you’re hearing.
Even worse, at least one of the loans that people invested in was allegedly non-existent. According to the SEC, 24 investors contributed more than $4 million towards a “purported” $5.65 million loan to an unnamed NHL player. And some of them were even shown a promissory note and loan agreement signed by the player.
But the SEC said the loan was “a sham”, and that the player never signed any documents for a $5.65 million loan. The player later filed for bankruptcy and listed Allen and Daub’s company as one of his creditors in the amount of only $3.4 million. Meanwhile, Daub continued to tell investors that the original $5.65 million loan was “performing as expected”, and the investors received returns, even though no loan payments by the NHL player were ever made.
Last October, Johnson filed for bankruptcy claiming assets of less than $50,000 and debts of more than $10 million.
The catalysts for this financial calamity are his parents, Jack Sr. and Tina Johnson. According to the paper, Johnson signed away his power of attorney to his mother after signing a 7-year deal with the Los Angeles Kings in 2011, three years after parting ways with super agent Pat Brisson.
She went on to borrow about $15 million in Johnson’s name via ridiculously high-interest loans.
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