orangeleader.com (Orange, Texas)

State News

March 21, 2013

Claims reach $31 million in scheme tied to coaches

DALLAS — The number of claims that can be verified for investors defrauded by the Texas financial adviser who committed suicide while under investigation in 2011 has reached nearly $31 million, according to the latest filing in a lawsuit brought by the Securities and Exchange Commission.

The filing Tuesday said the court-appointed receiver can verify 175 claims and $30.6 million lost in the alleged Ponzi scheme orchestrated by David Salinas, whose ties to numerous high-profile college basketball coaches convinced many of them to invest with him.

The filing says $20.4 million in newly-verified claims for 86 investors have been found since $10.2 million in claims for 89 investors were detailed in a January court filing. There are 16 claims of $500,000 or more in the two filings, including five of at least $1 million. The filings list the claims individually but don't identify the investors.

The receiver, Steven A. Harr, said Wednesday he's about halfway through the process of verifying claims in the case that began when the SEC sued Salinas' estate just weeks after he shot himself to death in his suburban Houston home in July 2011. Harr said he can't be specific about the returns investors can expect because some key assets, including real estate and loans, have yet to be substantiated.

The SEC claims Salinas, 60, was the mastermind of a scheme in which investors were sold corporate bonds that in fact didn't exist. The suit also alleges that Salinas raised money from investors and used it to make improper loans to affiliated parties instead of arms-length transactions.

Salinas operated Houston Select Basketball, a well-known AAU program that groomed highly-recruited high school players and sent many on to the college ranks.

His investors included Baylor coach Scott Drew, former Texas Tech coach Billy Gillispie and former Arizona coach Lute Olson. Baylor football coach Art Briles and former University of Houston football coach Bill Yeoman also were investors.

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