Houston AAU coach David Salinas befriended and then defrauded coaches and players in a phony bond scheme before committing suicide. How did he gain the trust—and the money—of so many? And where will the NCAA's investigation lead?

In the predawn darkness of July 15, less than a mile off shore, the missing man floated on a yellow Jet Ski on Galveston's West Bay. David Salinas, the celebrated operator of an elite AAU basketball team called Houston Select, had plenty of fuel to head landward—at 5:45 a.m., in fact, he'd gotten gas at a marina near his vacation home in Terramar Beach. Instead he bobbed in the waves, despondent in his ubiquitous baseball cap, boat traffic narrowly passing by. Salinas had been well-liked and trusted by a wide circle of friends that included Division I college basketball coaches, Texas oilmen and pro athletes. Now all of them wondered where the hell he'd gone. And how deep the trouble would go.

Salinas, chairman of the J. David Financial Group, hadn't returned calls or text messages for nearly a week, including those from the Securities and Exchange Commission, which needed to question him about eight figures' worth of bonds whose existence was in doubt. His panicked family, suspecting Salinas had gone to their vacation home, had called the Galveston police department at 10:46 the night before to report him missing.

Finally, at around 10 a.m. on this cloudy Friday, an orange Coast Guard helicopter spotted the stocky 60-year-old aboard his watercraft, lingering on the edge of the ship channel. As two young lifeguards approached on a Jet Ski of their own to retrieve him, Salinas calmly told them that he'd been on the water all night, "just drifting with the current."

Only later, once he had returned to the Terramar dock, did he begin to reveal his desperate situation, telling the Galveston police that he was depressed and had planned to crash his Jet Ski to end his life. The officers responded by escorting him to St. Joseph Medical Center in downtown Houston for psychiatric evaluation.

He was soon discharged. Within 48 hours, on the morning of July 17, Joel David Salinas died of a self-inflicted gunshot to the head.

"Dear Coach Salinas: Many people would find fault in a man as impatient as yourself, but I always found it to be one of your best attributes ... I realized that deep within that drill sergeant demeanor you portrayed at every practice and game was a man who cared more about his players than anything in the world."

—Former Princeton and Houston Select guard Ed Persia

The scam that bilked nearly $8 million from at least 13 NCAA basketball coaches—as well as $47 million more from many other investors, including a former New Mexico athletic director and a southeast Texas church whose bond holdings were valued at $13.1 million—was surprisingly crude. Everyone involved had invested in what they believed to be a conservative portfolio of U.S. corporate bonds—General Electric, Xerox, Walmart, IBM, J.P. Morgan. But according to several sources close to the investigations being conducted by the SEC, the Justice Department and the Secret Service, those bonds never existed. One financial statement obtained by SI shows that a set of 13 CUSIP numbers (the bonds' publicly verifiable identification codes) was fabricated. Another investor, who had given Salinas his life savings, had no CUSIP numbers on his statement at all.

Salinas, who attended Stephen F. Austin from 1969 to 1972, then left while under academic suspension, was not a registered investment adviser or representative. His 31-year-old company, the J. David Financial Group, had achieved success brokering insurance for university athletics programs (Houston's, for example). In the late 1990s the group turned to money management, and in 2006, Salinas created a new, registered investment firm, Select Asset Management. It began recruiting investors to J. David Financial. He picked Brian Bjork, a cofounder of Houston Select and team manager under Rice and Wichita State basketball coach Scott Thompson, to run the company, which has since been subpoenaed by the SEC.

"What also gives me pause is that Select Asset Management issued the statements, and not an actual brokerage firm," says Kirk Smith, a longtime Houston-based securities attorney. "None of it looks right." ("Brian was devastated by the degree to which David deceived investors and Brian himself," says Bjork's lawyer, Matt Hennessy.)

But few questioned Salinas, who drove around Houston in a black '06 Bentley and chartered a private jet to attend investors' basketball games. He donated hundreds of thousands of dollars to University of Houston athletics and sat on the search committee for a basketball coach that helped bring Willis Wilson to Rice in '92. (Wilson had an investment valued at $642,000 tied up in the scam.) Gregarious and magnetic, Salinas was renowned for his annual J. David Final Four parties: catered, meticulously planned networking events held for more than 10 years in the host city for coaches, athletic department administrators and friends. He rarely, if ever, attended the games. "I remember going to one [party]," says Marc Simpson, a former volunteer coach with Houston Select, "and just being in awe at all the college coaches that were there"—about 75 in all.

Salinas first gained entrée to NCAA coaching circles in the late 1980s. As a booster for the Rice athletic department, he became friendly with Thompson and began attending Final Fours with the Owls staff. "I'm shocked and surprised, like everyone else," says Thompson, whose J. David investment was worth $65,000. A few years later Salinas started Houston Select, which, as it became more prominent over the years, brought him in further contact with coaches who were on the recruiting trail.

The duped investors ranged from national figures (Texas Tech's Billy Gillispie, Baylor's Scott Drew, Gonzaga's Mark Few) to assistants (Gonzaga's Ray Giacoletti) to NBA players (Warriors forward Ekpe Udoh, a Baylor alum, and former Wizards swingman Cartier Martin, a Houston Select player before going to Kansas State). "[Salinas] was a close friend and somebody I thought we could trust," says a college basketball coach who invested in the bonds. "The hardest part for me is knowing I was deceived for so long." Adds Jim Hicks, a Houston-area scouting service director, "It's all kind of like your mama telling you there's no Santa Claus."

Even Chris Peden, the chief financial officer for Select Asset Management, felt the same sense of shock. "We didn't scrutinize David because of the influential people around him," says Peden. "He'd done this for over 20 years. These people had vetted him, so we felt we didn't need to." Now, for all the coaches who invested, a new, very different question arises: How much will the NCAA scrutinize them?

"Dear Mr. Salinas: The financial support was very much appreciated, but it was not the most important thing. You stand for many qualities that we try to instill in Jawann.... You are a man of your word."

—The parents of former Arizona and Houston Select guard Jawann McClellan

Salinas formed Houston Select because he wanted to build a team for his son Chris, who aspired to a college career. But Salinas, who had no real background in basketball, was soon consumed by the endeavor. As an example of his expanding connections among college coaches, Salinas met with then Arizona coach Lute Olson to copy the Wildcats' motion offense for the Select playbook. He installed defensive schemes and Princeton-style inbounds plays, and would stalk the sideline all in black except for white sneakers, often getting ejected. ("Shame on you, ref!" he'd yell.) His program began to hum, developing Division I players and winning national tournaments, including the 1995 Nike prep championship in Las Vegas.

Before long, says Jack James, a long-serving Select volunteer and the father of a former player, "David was the person you could trust to make sure your son became a man and got a college scholarship." Salinas would lecture his players—often publicly, often furiously—about the importance of being on time, treating women with respect and "playing like a thug, but living like a gentleman."

Generosity was Salinas's most talked-about quality. Canvass former players and coaches for Salinas stories, and the phrase you're most likely to hear is, "I don't know if this was legal, but ..." followed by a story of an act of compassion, invariably to a family who lived in a rough neighborhood like Houston's Fifth Ward. Salinas not only bought groceries for players; he also bought families refrigerators. He not only hired tutors for struggling kids; he also hired their lawyers during legal scrapes. He not only paid for eventual Auburn guard DeWayne Reed to go to night school in order to get NCAA-qualified; he also paid one of Select's volunteer coaches, who was in need of a job, to drive Reed to and from his classes. During AAU tournaments in Southern California, Salinas would give his kids $20 each and set them loose on the Santa Monica Pier. He bought some players their school clothes. Says former Gonzaga guard Demetri Goodson, who transferred to Baylor to play football this fall, "I looked up to David ever since I've known him."

When the news of Salinas's suicide and the financial scandal broke, though, these cherished relationships sparked suspicion. No NCAA bylaw prohibits university representatives from investing in ostensibly legitimate securities. But at least 10 Select players since 1997 have committed to schools that were employing a current or eventual Salinas bondholder. In the murky world of college recruiting, it could be perceived as a conflict of interest for an AAU manager to be investing money for coaches who could sign his team's players.

So it was, Tom Penders told the Associated Press last week, that he declined an offer from Salinas to join a $1 million investment pool in which 10 coaches would each contribute $100,000 shortly after Penders was hired as Houston's coach in 2004. Penders says Salinas ended his pitch by mentioning Houston Select and saying, "I helped all those [players] go [to Houston], and I can really help you." The NCAA has already begun to interview former Houston Select players, including Moses Malone Jr., who went on to play guard for Houston, Texas Tech and South Carolina State.

Of interest: the dates of coaches' investments with J. David Financial, which remain unknown, and the dates that Select players signed with their schools. There is also a lengthy list of other college basketball coaches who were Salinas clients—none of whose names are yet public—who did not invest in the bond scheme and whose money is not at risk. "What we know right now is this guy apparently took a whole bunch of people, coaches included, in this Ponzi scheme," a high-ranking NCAA official says. "What we don't know is whether or not there was any funneling of kids. That's what we have to ask around about and determine."

Adds a coach who was a client of Salinas's, "We invested because he thought he would make us money.... When it all comes out, I bet there will be a hundred coaches who invested with him."

"Dear Coach Salinas: I will always be grateful for what you have done and will continue to do for me and my family.... You as a dad, person, coach, friend and role model will always have a place in my heart!"

—Former Nebraska, Houston and Houston Select forward Louis Truscott

A few years ago, Salinas invited Houston Select center James Blasczyk, whose family had built the coach's beach house in Galveston, into his J. David Financial office in Friendswood. Displayed prominently was a golden basketball rim with the Select logo and the words THANKS COACH SALINAS on its backboard. Salinas directed the future USC big man to his desk's three computer monitors. Green, black and red numbers seemed to dance across the screens.

"He showed me how his computers worked, just moving bonds back and forth on a spreadsheet," Blasczyk recalls now. "One of the numbers I read was $2.5 million, and I was like, Damn."

Over the last several months such personal meetings had become increasingly rare. Formerly lengthy phone calls would be cut short after about a minute. Ultimately the players stopped hearing from Coach Salinas altogether. On July 17, the man they trusted was a memory. "Salinas was the toughest, most confident man I'd ever met," says Blasczyk. They all wonder why he had to drift away.

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PHOTOTAKEN FOR A RIDE Coaches and administrators in both basketball and football, as well as two NBA players, were among those duped by Salinas (above). The dollar figures represent the most recent value of their investments in bonds with Salinas—money that has seemingly vanished. PHOTODOUGLAS C. PIZAC/AP (GIACOLETTI)[See caption above] PHOTOJOE MURPHY/WIREIMAGE.COM (WILSON)[See caption above] PHOTOGREG NELSON (MARTIN)[See caption above] PHOTOJAMES SNOOK/SOUTHCREEK GLOBAL (GIOVANINE)[See caption above] PHOTOFERNANDO MEDINA/NBAE/GETTY IMAGES (UDOH)[See caption above] PHOTOGREGORY SMITH/AP (DAVALOS)[See caption above] PHOTOGREG NELSON (GILLISPIE)[See caption above] PHOTOCLIFF SCHIAPPA/AP (NEE)[See caption above] PHOTOBRUCE THORSON/US PRESSWIRE (SADLER)[See caption above] PHOTOJOHN W. MCDONOUGH (OLSON)[See caption above] PHOTOPETER G. AIKEN/GETTY IMAGES (DREW)[See caption above] PHOTOTIM G. ZECHAR/ICON SMI (JANKOVICH)[See caption above] PHOTODAVID E. KLUTHO (FEW)[See caption above] PHOTOPATRICK GREEN/SOUTHCREEK GLOBAL/ZUMAPRESS.COM (BRILES)[See caption above] PHOTOFERNANDO SALAZAR/WICHITA EAGLE (THOMPSON)[See caption above] PHOTOMANNY MILLAN (SKAER)[See caption above] PHOTOWENDI KAMINSKI/BEIMAGES (MCCLELLAN)JAWANN MCCLELLAN MORE QUESTIONS At least 10 of Salinas's players, including these three, signed with schools coached by investors in his alleged Ponzi scheme. (Edwards initially signed with Nebraska.) PHOTONELSON CHENAULT/US PRESSWIRE (EDWARDS)ALONZO EDWARDS [See caption above] PHOTODOUGLAS JONES/US PRESSWIRE (DUGAT)HENRY DUGAT [See caption above]