The indictment handed down last week seeks to convict Allen on 12 counts of wire fraud, six counts of aggravated identity theft, one count of conspiracy to commit wire fraud and four counts of illegal monetary transactions, according to The Palm Beach Post.
The allegations first came to light in early April, when the U.S. Securities and Exchange announced fraud charges against Allen, 36, and Daub, a financial professional formerly of Acton, Massachusetts, now living in Coral Springs.
Allen, whose lengthy National Football League career included six years spent with the Dolphins, is accused of fleecing investors by convincing them to provide high-interest bridge loans to athletes. In it, ALLEN and DAUB falsely told investors, “Our loan with [Athlete 6] is performing as expected”. He faces up to 20 years in prison on each of the wire fraud counts alone. The phantom loans were funded by money from investors, but Allen used the capital for various expenses.
But according to the federal indictment, those loans were falsified.
While CFP did make some loans to athletes, the indictment alleges that Allen and Daub also diverted millions of investor dollars to themselves and other business ventures.
Allen’s largest loan was to the NHL’s Jack Johnson, the Columbus Blue Jackets defenseman who filed for bankruptcy past year.
“As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies”, Paul G. Levenson, director of the SEC’s Boston office, said in a statement (via Ostrowski).
The FBI says most of the fraudulent proceeds went to Allen, including $4.1 million to Allen personally and $61,080 to casinos where Allen had accounts.
Allen should not be confused with current Steelers defensive back Will Allen.