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Houston AAU program founder David Salinas is dead due to an apparent suicide. His financial dealings have connected him to a growing list of college basketball -- and football -- coaches.
Texas Tech basketball coach Billy Gillispie invested $2.3 million in David Salinas' Ponzi scheme and now it appears that he was involved in a second one. According to legal documents obtained by Sports by Brooks, Gillispie invested $3 million in a Ponzi scheme set up by former Georgia Bulldogs coach Jim Donnan. Donnan's Global Liquidation (GLC) Ltd. filed for bankruptcy, claiming that the coach's fraudulent actions led to the business' demise.
Gillispie split his $3 million investment into separate ones of $1 and $2 to the GLC. Under the terms of the investments, Gillispie was promised 60 and 65 percent interest rates on his annual return. Donnan would find new loans to help cover these high interest rates, but eventually he failed to find new investors.
According to other documents, it appears that current Texas State head coach Dennis Franchione helped recruit Gillispie into investing in GLC, as he received commission fees for this. These documents, handwritten by Donnan, also indicate that several college coaches, ex-NFL players and ESPN analysts invested in this scheme.
For more on the Salinas story, keep track of this StoryStream.
Before he committed suicide, AAU Coach and investment advisor David Salinas handled millions of dollars on behalf of multiple college coaches including Billy Gillespie, Lute Olsen, Art Briles and Mark Few.
That list continues to grow as Sports Illustrated uncovers more sports-related names on Salinas' client list.
Two NBA players, 2010 Warriors lottery pick Ekpe Udoh ($350,000) and former Wizards swingman Cartier Martin ($374,000), were confirmed to be clients by SI. So was one former athletic director and NCAA selection committee member, Rudy Davalos ($83,000).
All-told, 13 college basketball coaches invested nearly $8 million with Salinas. The total amount of money in the bond is an estimated $55 million. None of that money has been recovered.
It still remains up in the air as to whether or not the NCAA will fully investigate the situation. However, as more names are unearthed and incestuous nature of each investor's relationship (coach, player, assistant, school employee) is pieced together, it's hard not to think that a formal inquiry isn't at least warranted.
For more on the Salinas story, keep track of this storystream.
A group of college basketball coaches held a meeting in Las Vegas on Sunday that had nothing to do with basketball.
Or, at least, nothing that directly had to do with basketball. All were victims of alleged fraud by David Salinas, a Texas financial planner who invested for many top college coaches - and apparently made off with their money.
It was previously reported that one topic discussed at the meeting would be "perceived NCAA issues that have arisen" as a result of the coaches' financial ties to Salinas, who also ran a Houston AAU program. That appears to have been incorrect. The coaches have maintained that they did not attempt to recruit players from Salinas' AAU program, at least not in connection to their financial ties to him.
Instead, they were mostly just trying to figure out a way to get their money returned. The focus of the meeting, attorney Dennis Coleman says, was "individual assets."
Salinas committed suicide last week.
For more on David Salinas, continue to follow this storystream.
The coaches who were hoodwinked by David Salinas — some for hundreds of thousands of dollars — met with lawyers in Las Vegas Sunday at 1 p.m. PT to discuss how to go about getting back the money they lost. Per Andy Katz:
According to sources, the purpose of the meeting is to centralize the coaches' issues in an attempt to make their case for the return of money lost through the Salinas' alleged scheme. The meeting will also address coaches' concerns about any perceived NCAA issues that have arisen during the course of the public disclosure of the scheme.
A group of the coaches who lost money with Salinas told ESPN.com over the past week that they never looked to get players from Salinas' Houston Select AAU team in exchange for investing with him. But they also said they understand how that perception was created since he was an AAU program owner. A few coaches said in hindsight it wasn't the best idea to invest with him based on the perception. Still, they are adamant that their issues are only dealing with lost bond funds and nothing else.
Salinas was under investigation for organizing a multi-million dollar Ponzi scheme in which he bilked millions from dollars for college basketball and football coaches. He committed suicide a week ago in his home.
In all likelihood, none of the coaches or schools that employed will be sanctioned in the aftermath of the scandal, but in the court of public opinion, they look pretty guilty. They invested a ton of money with a guy who had the ear of a number of college basketball prospects over the past couple decades. This meeting will be a gameplan on how to deal with the skepticism to some extent.
More importantly to the coaches involved, though, the lawyers will try to formulate the best course of action for getting the money back. No word on if the Wilpons had anything to do with this.
Sam Khan of the Houston Chronicle reports that an internal review by the Houston Cougars has found no compliance issues related to David Salinas, a Houston-based financial planner and university booster who ran the Houston Select AAU team.
Salinas, 60, was found dead of a self-inflicted gunshot wound on Sunday. At the time of his death, Salinas was reportedly under investigation by the United States Securities and Exchange Commission for a series of failed investments on behalf of his clients, which included several high-profile college coaches.
"After our initial internal review, we have not discovered any compliance issues related to David Salinas and his AAU Houston Select program," UH athletic director Mack Rhoades said in a statement. " Our hearts go out to those people affected by the happenings of this past week."
In a statement released Thursday, Lute Olson said that his investments with David Salinas came after he had retired from coaching. Olson reportedly invested $1.17 million with the Houston AAU coach and investment manager who committed suicide on Sunday. Salinas was under investigation by the Security and Exchange Commission (SEC) for essentially establishing a ponzi scheme that lost millions for investors.
Salinas' investments have raised the ire of the NCAA due to the nearly $8 million he took from major current and former college basketball head coaches, with many questioning whether coaches also earned undue influence over athletes on Salinas' AAU squads as part of their investment. Jawann McClellan, a former Wildcat under Olson who played for Salinas as a high schooler has gone on record to say that the relationship between Olson and Salinas was not a factor in his recruitment.
There has been no confirmation that the NCAA has officially launched an investigation into Salinas' dealings with college coaches. Other coaches linked to Salinas include Texas Tech's Billy Gillispie, Nebraska's Doc Sadler, U.S. Merchant Marine Academy coach Danny Nee, Texas A&M-Corpus Christi coach Willis Wilson, Gonzaga assistant Ray Giacoletti, Augustana College's Grey Giovanine and former Houston and Nevada coach Pat Foster.
For more, stay tuned to the storystream here.
Former University of Arizona guard Jawann McClellan says Lute Olsen's relationship with the late David Salinas was not a factor in his decision to attend the school, Bruce Pascoe of The Arizona Republic reports.
Salinas, an investment adviser who had founded the Houston Select Basketball summer program in 1992, died of an apparent suicide on Sunday. Salinas was the subject of an investigation by the Security and Exchange Commission (SEC) for fraudulent practices that may have cost several college coaches who invested with Salinas millions of dollars.
Olsen reportedly invested $1.17 million with Salinas.
"Coach Olson was probably one of his biggest clients and (my committing to UA) caught a lot of people off guard," McClellan said on Tuesday. "A lot of people thought I was going to Texas, but I was confident in my decision."
McClellan said he chose Arizona over Texas and Kentucky because of Olsen and former assistant coach Josh Pastner. During his four-year career, McClellan averaged 7.7 points and 3.3 rebounds per game. McClellan is now coaching high school basketball and with the Houston Select team with plans to coach at the college level.
"Everything that I've heard is very shocking," McClellan said of Salinas' passing and the subsequent fallout. "I'm dealing with it, probably not well. It's just shocking to me that everything came out about him."
There have been conflicting reports about whether the NCAA was interested in the case of David Salinas, a Houston AAU program founder who apparently committed suicide after running a Ponzi scheme that involved a number of college basketball coaches. But now Sports Illustrated reporter Pablo Torre is adamant about the NCAA's interest:
Just wanted to add: yes, NCAA has been asking all types of people about this case. Official "investigation" is a red herring. They care.
That doesn't sound like an full-fledged NCAA investigation, but certainly something beyond mere passing interest: "investigating," perhaps, with the rest of the formal investigation to come. And that only makes sense, considering Salinas' background as an AAU figure and a person who allegedly took millions from coaches. Even if there's nothing nefarious about Salinas' work as a manager of coaches' money beyond incompetence, there's more than enough smoke for the NCAA to be sniffing around.
If that's the case, the NCAA could be delving into a number of prominent coaches' dealings with Salinas. Former Kentucky coach Billy Gillespie and former Arizona coach Lute Olson are among the coaches who allegedly invested money with Salinas.
For more on the Salinas story, keep track of this storystream.
Late Tuesday night, ESPN's Andy Katz cited a source who said that the NCAA did not intend to launch a formal investigation into fraud allegations against David Salinas, a Texas financial planner who was also an AAU coach and benefactor with close financial ties to many top college coaches.
But a Houston television station now reports that the NCAA is looking into Salinas' relationships with its coaches.
[Former Houston-area high-school player Moses Malone Jr.] said he did not tell the NCAA investigator anything specific, but he said she asked him a lot of questions, including if he would agree to meet in-person and Malone declined.
"She wanted to know was I swayed or steered in anyway with my recruiting," Malone said. "What was his involvement in my recruitment at the University of Houston, his association with (University of Houston assistant) Coach (Alvin) Brooks?"
We'll see whether the NCAA does, in fact, launch a formal investigation, but to hear Malone tell it, it certainly sounds like it's interested in what Salinas was up to. And given the amount of money involved (Salinas is supposed to have bilked various college coaches for about $8 million), the results of any formal investigation should be noteworthy indeed.
On Sunday, Salinas was found dead, the result of an apparent suicide.
For more on the Salinas story, keep track of this storystream.
The organization that has become most famous for its investigations recently has decided it doesn't need to bother with one for this doozie. J. David Salinas, a Houston-based AAU program's executive, allegedly committed suicide, revealing a failed Ponzi scheme that totaled almost $8 million in coaches' money.
In other words...what?
Please explain this, Andy Katz:
A high-ranking source with direct knowledge of the NCAA's interest in the case told ESPN.com that the coaches invested money in the alleged scheme but that it isn't an NCAA issue and concluded no rules violations occurred.
...
The source said that over the past four to five years Salinas was out of the picture in recruiting. Salinas was more involved when his son played for Houston Select years earlier.
Other highlights from the story include Salinas hosting a party at the House of Blues in Houston with "hundreds" of coaches, Katz's all-knowing source asking desperately, "where are the bonds?" and the story of dozens of college coaches perusing their investments and realizing they had just been bamboozled.
The real problem with this bit is the NCAA's seeming apathy over any infractions the coaches may or may not have committed. Their bloodlust knows no bounds when it comes to making sure unpaid athletes remain unpaid, but when the supposed infractions are committed by the coaches, and only by the coaches, the NCAA decides it's not worth their time.
Where are the bonds, indeed.
David Salinas, while not working as an investment adviser, ran a well-known basketball camp in Houston, but on Sunday he was found dead as a result of a possible suicide, as originally reported by CBSSports.com.
The pieces of the puzzle in determining why he committed suicide are beginning to come together as it seems as though Salinas had run a Ponzi scheme that failed and that much of the investments came from college basketball coaches. SI.com has the full details.
More than a dozen current and former college coaches -- including Texas Tech's Billy Gillispie, Arizona's Lute Olson, Baylor's Scott Drew and Gonzaga's Mark Few -- are believed to have lost investments most recently valued at over $7.8 million combined with the late Houston-area businessman and AAU basketball operator J. David Salinas, sources close to the matter tell SI.com.
According to SI.com, Gillispie's invested $2.3 million in the scheme while Olson invested $1.17 million, Drew' invested $621,000 and Few invested $353,000.
Salinas was in the midst of a months-long investigation into his businesses by the U.S. Securities and Exchange Commission.
The full list of college basketball coach investors includes Nebraska coach Doc Sadler, Texas A&M-Corpus Christi coach Willis Wilson ($642,000); Gonzaga assistant Ray Giacoletti, United States Merchant Marine Academy coach Danny Nee, Augustana College coach Grey Giovanine and former Houston and Nevada coach Pat Foster.
Baylor football coach Art Briles and former Houston football coach Bill Yeoman are also on the list of investors.
Where things begin to get sticky is when you compare the list of college coaches that invested with Salinas to the colleges that top players on his AAU team ended up at. It's not hard to note a pattern that includes Gonzaga, Arizona and Nebraska.
Former University of Houston basketball coach Tom Penders told The Daily that Salinas once solicited a $100K investment from him, implying that doing so would help him gain access to Salinas' prospects.
The NCAA has not commented on the matter yet and there is no existing NCAA bylaw prohibits coaches from investing in this way, though the conflict of interest that comes with investing money with an AAU coach who also sends his players to your university will not go unnoticed.
Visit our SB Nation College Basketball hub for more on the hardwood.
Tom Penders, the former University of Houston men's basketball coach, said he turned down an offer to invest with David Salinas in 2004 out of fear of violating NCAA rules. Salinas was a financial advisor and former Houston area AAU basketball coach who killed himself last weekend.
"I told him, I’d like to have a good relationship and I’ll go watch your teams play,’" Penders said. "But I just thanked him and told him I don’t think I can get involved.
"I’m just glad I never invested with him. Coaches are supposed to be street smart. I just can’t believe guys wouldn’t know that was against the rules. It’s beyond me."
Since Salinas' death, CBSSports.com has discovered that the Securities and Exchange Commission had been investigating Salinas for possibly defrauding several basketball coaches. Penders, who retired in 2010, said the implication was that investing with Salinas would help steer AAU players to Houston. This news could be significant as it would indicate a clear violation of NCAA rules. Salinas' AAU program sent notable players to such programs as Texas, Arizona and Kansas State.
On Sunday evening, CBSSports.com uncovered several more college basketball coaches who were connected to investment adviser David Salinas, who died of an apparent suicide. Earlier in the day, former Arizona coach Lute Olson and current Texas Tech coach Billy Gillispie were identified among the initial group of coaches who had invested with Salinas. New coaches to emerge in this investigation include Nebraska's Doc Sadler and U.S. Merchant Marine Academy coach Danny Nee.
However, this list is likely to grow, though a CBSSports.com source believes many coaches will try to disavow any connection with Salinas. One of the coaches involved did speak with CBSSports.com on Sunday night under the condition of anonymity and said:
"We're not concerned about the NCAA right now. We're just scared we got Madoffed."
Bernie Madoff had developed a giant Ponzi scheme that eventually fell apart in 2008 when he was unable to fill requests that totaled several billion dollars. While details of Salinas' possible fraud are not yet available, it is believed that these coaches and others have lost millions of dollars.
Visit our SB Nation College Basketball hub for more on the hardwood.
David Salinas, while not working as an investment adviser, ran a well-known basketball camp in Houston, but on Sunday he was found dead as a result of a possible suicide, reports CBSSports.com. It is possible his suicide is related to the recent investigation the U.S. Securities and Exchange Commission started concerning possible fraud.
According to CBSSports.com's sources, some of Salinas' clients were college basketball coaches who lost millions of dollars under his advisement:
Former Arizona coach Lute Olson, Baylor coach Scott Drew, Texas Tech coach Billy Gillispie and former Utah coach and current Gonzaga assistant Ray Giacoletti are among those CBSSports.com has confirmed had money invested with Salinas. "But the list is much longer," one source said. "Lots of coaches had money with him, but they're going to try to deny it and just hope it doesn't come out."
One major issue here, the report goes on to say, is that Salinas' basketball camp was where many of these same college coaches came to recruit their future student-athletes. This appears to be a possible conflict of interest, though the NCAA has yet to say anything on the matter.
Visit our SB Nation College Basketball hub for more on the hardwood.
David Salinas' Ponzi Scheme May Have Cost Houston Athletic Foundation 40 Percent Of Its Assets
David Salinas, the well-known member of a ponzi scheme that committed suicide during an investigation earlier this year, affected quite a few athletes and coaches while acting as a financial adviser. The latest news indicates that his ponzi scheme may have also cost the Houston Cougars quite a bit as well, apparently, as nearly 40 percent of the school's claimable assets may have been tied up in accounts related to Salinas.
The Houston Athletics Foundation, a foundation that provides scholarships for the school's athletes, may have lost more than $2 million according to a report from the Associated Press.
Fortunately, the majority of the money tied up in the apparent fraudulent bonds was not earmarked to go to athletes -- and that that was will be still be paid, according to the school's athletic director.
For more on David Salinas, continue to follow this storystream.
Dec 19 8:01a by Scott Schroeder - 0 comments