Report: Jack Johnson a debtor in Will Allen’s Ponzi scheme
Earlier this week, the Securities and Exchange Commission charged Allen with fraud for allegedly operating a $31 million Ponzi scheme. Allen allegedly worked with a woman named Susan Daub to form several companies offering loans to professional athletes. The pair offered investors up to 18% interest in exchange for providing loans to athletes who were between paychecks.
A civil suit reveals that part of the allegations involves a loan given to Johnson, according to Strang.
The suit alleges that Allen’s company, Capital Financial, claimed to have given Johnson a $5.65 million loan, but he actually signed a $3.4 million promissory note after declaring bankruptcy. Strang reports that Johnson could decide to sue Allen and his associates.
Johnson declared bankruptcy in October citing poor decisions by his financial advisers, including fraudulent transactions and predatory lending.
More than 40 people invested money into the Ponzi scheme between 2012 and earlier this year. The Associated Press reports Allen gave $18 million in loans and used $7 million for his own spending.
Johnson, 28, signed a seven-year, $30.5 million contract before the 2011-12 season. In 77 games this season, he has eight goals and 29 assists.
- Paul Palladino