As Georgia football coaches go, Jim Donnan is the only one who collapsed under the weight of the SEC.
Not that SEC — the real one.
The Securities and Exchange Commission has charged Donnan with conducting an $80 million Ponzi scheme with an Ohio partner through a West Virginia company, GLC Limited.
This is even worse than losing to Kentucky in your first season.
Donnan mostly made his mark as a football coach at Marshall, where he won Division 1-AA championships. At Georgia, he was a step up from Ray Goff but not nearly as good as his replacement, Mark Richt. He had an impressive enough career to be inducted into the College Football Hall of Fame in 2009. What happened after that, I don’t know.
Once a coach or an athlete has achieved a certain level in sports and made a fair amount of money, it should not be that difficult to capitalize on your name — legally.
Donnan never coached again after getting fired following the 2000 season. He went into broadcasting. He got a job at ESPN. He did local sportstalk radio. Everything seemed fine. But often that competitive edge, the need for a thrill, that drives coaches and athletes doesn’t leave them post-career. That can become their undoing. It’s the simplest explanation I can think of for what Donnan has been accused of.
If the allegations are true, Donnan did the worst possible thing: He used his name to commit fraud against those who considered him a friend. He duped coaches and former players.
Among the SEC’s claims: “Donnan recruited the majority of investors by approaching contacts he made as a sports commentator and as a coach. For instance, he capitalized on his influence over one former player by telling him, ‘Your Daddy is going to take care of you. … If you weren’t my son, I wouldn’t be doing this for you.’ The player later invested $800,000.”
Imagine if Donnan didn’t consider him a son.
This story first broke last year. GLC Limited filed for bankruptcy in March of 2011. Donnan filed for bankruptcy a few months later. Financial disclosures indicated he owed $8.25 million to GLC Limited, according to a story in the Journal-Constitution. The court filing included 65 pages of creditors from several states.
In July of 2011, our Tim Tucker quoted Donnan’s attorney, Edward Tolley, as saying: “If this was a phony scheme, a lot of people were fooled, including, I submit to you, Jim Donnan.”
That defense apparently did not sway the SEC.
According to a news release on the charges, Donnan and his partner, Gregory Crabtree, ran a wholesale liquidation business that earned “substantial profits by buying leftover merchandise from major retailers and reselling those discontinued, damaged, or returned products to discount retailers. They promised investors exorbitant rates of return ranging from 50 to 380 percent. However, only about $12 million of the $80 million raised from nearly 100 investors was actually used to purchase leftover merchandise, and the remaining funds were used to pay fake returns to earlier investors or stolen for other uses.”
So much for the simple and stress-free life of a football coach. Maybe Donnan should’ve just followed Goff into the chicken business.
By Jeff Schultz
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