A former U.S. pro football player has been charged with allegedly operating a Ponzi-like scheme that was based around making loans to pro athletes.

The U.S. Securities and Exchange Commission (SEC) said Tuesday it has brought fraud charges against Will Allen, who played in the NFL with several teams; along with his business partner, Susan Daub. It alleges they operated a Ponzi scheme that raised more than US$31 million from investors who were promised profits from loans to professional athletes.

The allegations, which have not been proven, are set out in a complaint that was filed under seal in federal court in Boston on April 1. That complaint was unsealed late yesterday, and the court imposed an asset freeze, and other preliminary relief, against the defendants.

The SEC’s complaint alleges that Allen, Daub, and their firms (Capital Financial Partners Enterprises LLC, Capital Financial Partners LLC and Capital Financial Holdings LLC) violated federal anti-fraud laws and the SEC’s anti-fraud rules.

In addition to the relief obtained last week, the SEC is seeking a court order to restrain the defendants from violating the same laws and to require them to return their allegedly ill-gotten gains with interest and pay civil monetary penalties.

According to the SEC’s complaint, Allen and Daub sought investors to fund loans to professional athletes who were short of cash, promising interest of up to 18% on those loans. It alleges that from July 2012 through February 2015, the defendants paid approximately US$20 million to investors, but that they had only received about $13 million in loan repayments from athletes, so they used money from other investors to make up the gap of nearly $7 million. It also alleges that they misled investors about the terms and circumstances of some of the loans, and that they used some investor funds to pay personal expenses or to fund other business ventures.

“The defendants sold investors on the idea of lending money to pro athletes, but we allege that’s not where a large portion of the investors’ money went. As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies,” said Paul Levenson, director of the SEC’s Boston office.