Former UGA Coach Accused of Playing Critical Role in Ponzi Scheme
In an adversary complaint filed this week in the U.S. Bankruptcy Court for the Southern District of Ohio, Western Division, GLC Ltd. accused former UGA football coach James "Jim" Donnan, Donnan's wife, and their children of allegedly making millions of dollars in a Ponzi scheme. The complaint lists Donnan's children as defendants, and seeks judgments and injunctions against them for monies allegedly obtained through a series of fraudulent transfers, which totaled $14,557,228.50.
"James and Mary Donnan's ponzi investment scheme allowed James and Mary Donnan, as well as the Defendants, to make substantial personal profits at the expense of GLC and its individual investors," alleges the complaint.
GLC Ltd is a retail liquidation business based in Proctorville, Ohio and a holding company for Global Liquidations. On Feb. 28, 2011, GLC Ltd. filed for bankruptcy under Chapter 11. Shortly thereafter, the company filed an adversary complaint against its former owners, Greg and Linda Crabtree, which accused them of operating a Ponzi scheme which left the company owing between $26 and $29 million to 574 creditors, many of whom were Tri-State residents.
According to this week's complaint, Jim Donnan and his wife were among the very first investors in GLC Ltd. and played a crucial role in both the Ponzi scheme and the company's downfall. Allegedly, Donnan represented himself as an officer of GLC to third parties and signed numerous checks and agreements on the company's behalf. The complaint further alleges that Donnan solicited investments on behalf of the company by promising high interest rates and telling investors that invested funds would be used to purchase pre-sold inventory. Ultimately, however, much of the money was used to repay initial investors, such as the Donnans, instead.
"James and Mary Donnan's Ponzi scheme rendered GLC insolvent soon after it was commenced, [and] that insolvency deepened as GLC was required to solicit ever-increasing investments from an ever-increasing numbers of investors. Eventually, James and Mary Donnan were unable to secure the volume of new investments necessary to maintain their investment scheme and GLC defaulted on its financial obligations, including outstanding notes to investors solicited by James and Mary Donnan."
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