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.
Olson filed a lawsuit in September 2011 seeking to recover $1 million he lost in the bogus bond scheme, but the suit was later dismissed.
Olson's attorney, Michael Aguirre of San Diego , said Wednesday he believes victims of Salinas' scheme will receive only a "very small percentage" of what they invested, in large measure because Harr has initiated a "very modest agenda" in his search for assets.
"First, they were victimized by the investment and now they're being victimized by the receiver," Aguirre said.
Harr said Aguirre's criticism is misguided because it isn't based on actual knowledge of the receiver's work.
"He doesn't know what I'm doing, and it's not in my best interests to tell the world what I'm doing, because this is an investigation," Harr said.
A Salinas associate, Brian Bjork, pleaded guilty last month to a single count of wire fraud stemming from a separate scheme that stole $1.4 million from nine investors. The largest investor was the nonprofit organization that raises money for athletic scholarships at the University of Houston.
Bjork, 43, is a defendant in the SEC's suit, but his plea agreement describes the $1.4 million fraud as "a scam within a scam" and says the government has yet to find that he profited directly from Salinas' alleged Ponzi scheme.
Bjork, who also was heavily involved in Salinas' basketball program, is due to be sentenced June 14.