Report: Jack Johnson a debtor in Will Allen’s Ponzi scheme

Friday April 10th, 2015

Columbus Blue Jackets defender Jack Johnson is a debtor in the Ponzi scheme allegedly run by former NFL cornerback Will Allen, ESPN’s Katie Strang reports.

Earlier this week, the Securities and Exchange Commission charged Allen with fraud for allegedly operating a $31 million Ponzi schemeAllen 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.

• MUIR: Johnson’s bankruptcy a sad but common story for athletes

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

SI Apps
We've Got Apps Too
Get expert analysis, unrivaled access, and the award-winning storytelling only SI can provide—from Peter King, Tom Verducci, Lee Jenkins, Andy Staples, Grant Wahl, and more—delivered straight to you, along with up-to-the-minute news and live scores.