ATLANTA (AP) — Investors accuse a former member of the Georgia Board of Regents of bilking millions from hundreds of investors in a Ponzi scheme.
The civil lawsuit filed Friday against C. Dean Alford and others in federal court in Columbus accuses Alford of enticing people to invest in turning waste from an Augusta landfill into biodiesel pellets that would be sold to European buyers and Delta Air Lines.
The plaintiffs say Alford then asked people to invest in plans by his Conyers-based company, Allied Energy Services, to build a solar power installation. However, the suit says, Alford used the money for himself and to pay interest to the first project's investors, the classic hallmark of a Ponzi scheme.
A lawyer for Alford didn't immediately return a phone call and an email Tuesday.
The suit alleges that 436 investors gave money to Alford for one of the two projects. Only about 40 are plaintiffs, saying they loaned him more than $6 million and were promised super-high interest rates of 12% to 20%
They say another defendant, Tennessee Dr. Jitendra Gandhi, recruited investors on behalf of Alford and was paid commissions for each person who invested. Gandhi didn't immediately return a phone call Tuesday. For a while, people who invested in the waste-to-energy project got interest payments, but the suit says they stopped in April.
"When the plaintiffs requested their interest payments, they were repeatedly rebuffed," the lawsuit states. "First, Dean would ignore their requests all together. Followed by next telling the Plaintiffs that he did not have their address to mail the check. Next, Dean would email the plaintiff and say the 'check was in the mail' or that Allied was having administrative staff issues which was holding up the checks from being processed. Lastly, when those excuses ran short, Dean refused to respond to the plaintiffs."
Alford was arrested on racketeering and theft charges this month, accused of trying to falsify financial transactions with Florida-based Versant Funding. The charges say the 66-year-old Alford falsely claimed his company was owed $2.25 million from five entities, including the University of Georgia, which he oversaw as a regent. He wanted to sell what he represented as the future revenue of his company to Versant for $1.8 million, criminal charges say.
The university system has said the University of Georgia was never doing business with Allied and that the invoice was a fiction.
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