Former University of Georgia football coach (and former ESPN college football analyst) Jim Donnan has been accused of making millions of dollars off of a Ponzi scheme. Federal court documents filed on Thursday as part of a larger Ohio bankruptcy case allege Donnan was involved in a scheme that also funneled money to his three children and their spouses. The bankruptcy case involves GLC Ltd., a West Virginia-based company.
GLC was formed in March of 2004 and held investments from many big sports names. Former Dallas Cowboys coach Barry Switzer, Virginia Tech head football coach Frank Beamer, Texas State head football coach Dennis Franchione and Texas Tech head football coach Tommy Tuberville were all investors at one time or another.
Donnan and his wife Mary “solicited investments from more than 50 individuals and entities to GLC.” For their work they made commissions ranging from 15 to 20 percent for each new investment they brought in.
The Donnans are identified in the court documents as being GLC Enterprises’ first investors and put more than $5.4 million of their own money into the company. Overall, investors dumped more than $82 million into the company, but less than $12 million was spent on inventory and more than $13 million in investor money remains unaccounted for. When revenues fell, GLC used money from new investors to pay old investors, which made it a classic Ponzi scheme.
According to Tuberville, Donnan was the recruiter, calling up his friends and getting them to invest. Beamer confirmed that he invested in GLC Enterprises at Donnan’s behest, but doesn’t believe his friend knew what was really going on. “I just refuse to believe that Jim knew what it was when it started,” Beamer said. “Knowing Jim over the years, I don’t think he’d get his friends into something like that.”
Donnan’s attorney denies that his client was aware of the Ponzi scheme, but, according to the court documents, Donnan was an officer in the company who signed applications for GLC bank accounts and signed checks on behalf of the company. His lawyer further denies those claims.
The Donnans and their family members made more than $14.5 million from GLC, and the lawsuit – which is being brought by GLC’s new ownership – alleges that the Donnans transferred “significant assets” to their children.
GLC Enterprises filed for bankruptcy in February, and Jim and Mary Donnan filed for Chapter 11 earlier this month. Donnan offered to pay his creditors back roughly $5 million, but they wanted $8.25 million.
Donnan was the head coach at Georgia from 1996-2000. Before that he was the head coach at Marshall from 1990-1995, where he took the Thundering Herd to four FCS championship games and led them to a national title in 1992. Donnan had a career record of 104-40, including a 4-0 record in bowl games.
In May 2009, Donnan was selected to the College Football Hall of Fame for his coaching success at Marshall.