SWITZER WINS FEDERAL LAWSUIT
Former OU football coach Barry Switzer has prevailed in a lawsuit that claimed Switzer benefited from a Ponzi scheme tied to former Georgia coach Jim Donnan.
Another comeback for Barry Switzer.
The former University of Oklahoma football coach has prevailed in a lawsuit that claimed Switzer benefited from a Ponzi scheme tied to former Georgia coach Jim Donnan.
Wednesday, a U.S. district court judge in Georgia entered a judgment in favor of Switzer in a lawsuit filed by a trustee tasked with liquidating Donnan’s bankruptcy estate.
As explained in a statement released through Switzer’s attorney on Thursday, Donnan filed for bankruptcy after it was discovered that GLC Ltd., a company Donnan had invested in, operated a Ponzi scheme. Before the Ponzi scheme was discovered, Donnan helped obtain a $250,000 loan for the company from a company owned by Switzer.
Donnan personally guaranteed the loan, but GLC defaulted in 2011. Donnan bought the promissory note from Switzer’s company for the remaining balance due and owed on the note. After Donnan filed bankruptcy, the bankruptcy trustee sought to recover the money from the loan paid to Switzer, claiming in court that the transaction was an extension of GLC’s Ponzi scheme.
In a statement, Switzer said he was happy the matter had been closed.
“I knew from the beginning that I had done nothing wrong. Under no circumstances would I have ever knowingly associated myself with a Ponzi scheme nor would I have loaned money to a company operating a Ponzi scheme,” Switzer said. “I first met Jim Donnan in early 1980s. He coached for me at the University of Oklahoma. From what I know about Jim and his character, I don’t believe he knew GLC was operating a Ponzi scheme and a jury of 12 who acquitted him of all criminal wrongdoing apparently did not think so either.”
In 2012, a federal grand jury indicted Donnan on fraud charges
PAULA BURKES,
involving what authorities said was a scheme that cheated about 100 investors out of millions of dollars. A jury acquitted Donnan on all counts in 2014.
The indictment claimed Donnan and his business partner, Gregory Crabtree, cheated investors, mostly college football coaches and football players, out of millions through their company, GLC Ltd. Prosecutors said investors were told that GLC was in the wholesale liquidation business with lucrative profits from purchasing leftover merchandise from major retailers at a discount and later reselling it.
The U.S. Securities and Exchange Commission claimed that only $12 million of the $80 million GLC raised from investors was used to purchase leftover merchandise. The remaining money was used to pay fake returns to early investors in the scheme, or went to enrich the scheme’s operators, the SEC claimed.
Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security and was sentenced to five years in federal prison. Crabtree also was ordered to pay more than $20 million in restitution to GLC’s victims.
Other lawsuit
GLC Ltd., now controlled by a trustee tasked with liquidating the company, sued Switzer and his son-in-law, Hunter Miller, in January in Cleveland County District Court, claiming Switzer and Miller owe the company money that was fraudulently transferred to them before GLC filed for bankruptcy in 2013.
The Cleveland County lawsuit also was dismissed Thursday, said Switzer’s attorney, Armando Rosell.
At the time the lawsuit was filed, there were media reports stating that Barry Switzer Family LLC was a “shell” company, Switzer said in a statement.
“Barry Switzer Family, LLC is not a shell company,” Switzer said. “I started that company 12 years ago to hold my personal investments and for estate planning purposes. The company has real assets, real liabilities and commitments with numerous financial institutions and business associates.”