Former TCU Player Involved in Ponzi Scheme?

Texas Ponzi Scheme Lawyers

Eldon "E.A." Gresham, a former standout football player for Texas Christian University, is accused by a federal agency of bamboozling dozens of people out of more than $15 million in a Ponzi scheme that relied on investors’ Christian faith and his long-standing friendships, according to court documents and information from a federal regulatory agency.

The case against Gresham was initiated after someone in Texas complained to authorities, said an attorney familiar with the case. A government lawsuit against Gresham was unsealed in July.

The Fort Worth Division of the U.S. Postal Inspection Service assisted the Commodity Futures Trading Commission in its investigation of Gresham, who is accused of luring investors by telling them that the "Lord had blessed him" with a successful foreign currency trading business. A spokesman for the inspection service said that the U.S. attorney’s office for the Northern District of Texas had also opened a case on him. He referred questions to that office.

Kathy Colvin, a spokeswoman for the U.S. attorney’s office, said she could not confirm an investigation. Gresham has not been criminally charged, according to federal court documents.

Messages left for Gresham, who lives in Peachtree City, Ga., were not returned. Court records do not list an attorney representing him.

It isn’t clear whether any of Gresham’s investors were fellow TCU alumni. Gresham graduated in 1969 with a bachelor’s degree in English and history, according to the university. He played football for the Horned Frogs beginning in the mid-1960s and won an all-conference selection at the center position in 1967.

Richard A. Rice Jr. an Atlanta attorney representing Gresham’s son, Kirk, said that he did not know whether any of the investors were connected to the university but said at least one is from Texas. Gresham’s son is a relief defendant, meaning the government accuses him of receiving money from the alleged scheme but does not accuse him of participating in it, Rice said.

"I’m assuming there’s at least one [investor in Texas] because the investigation initially resulted after an initial complainant came from Texas," Rice said.

Gresham began trading foreign currency, known as forex, in 2002, according to the commission’s lawsuit.

It lays out these allegations:

From about January 2004 until July, Gresham targeted people of the Christian faith to provide funds to trade in forex and told them he had never had a "single losing month."

"Gresham told prospective customers that he was offering his program to a limited number of fellow Christians for a limited time," the lawsuit says. He promised returns of 5 to 10 percent — per average month — and told one woman he could triple her investment in a year.

Gresham told investors, who eventually numbered more than 75, that his investing formula would make money whether the market was "up, down or sideways" and that he was successful because of God.

Gresham solicited some people to invest by opening and "supposedly funding" an account for them based on their friendship with him over the years, the suit alleges. He then is accused of sending a string of e-mail statements showing extraordinary monthly returns. After a time, customers were persuaded to invest their own money, the suit says.

He further persuaded customers to withdraw retirement funds by telling investors they could earn large returns through forex trading, court documents show.

In reality, the suit alleges, Gresham only invested about $2 million of the $15 million he received in a forex trading account. He later withdrew $1.4 million of the $2 million from that from the trading account and lost $90,000 through trading, according to the suit.

"As the Bernard Madoff Ponzi scheme unfolded in the media in late 2008, Gresham communicated to concerned customers that all their funds with Gresham were safe and would be returned when due," the suit says. "These statements were and continue to be false. Gresham has never had sufficient funds on hand to return all customers’ principal and purported returns on investment."

Investors began trying to retrieve their money in May or June but none have been successful in recovering their money, according to the commission’s suit. Gresham’s assets were frozen last month.

Paul Shabay said his father knew Gresham growing up. He wouldn’t say whether his father, P.D. Shabay, had invested with Gresham.

"They were best friends growing up," Paul Shabay said.

"It’s been pretty painful for our family. It’s been such a shock."

Gresham grew up in Graham, where he was a star football and basketball player and played with Shabay. Gresham was a high school All-American in football and later was an all Southwest Conference selection at TCU.

Despite the allegations, some showed support for Gresham on a TCU sports fan Web site, killerfrogs.com. One poster on the site’s message board said Gresham "was a great role model for me. He attended University Baptist [Church] when I was a high school kid in its youth group. He frequently donated his time to our youth camps and lock-ins, and openly shared his faith with anyone willing to listen."

Another wrote, "I knew EA (Gresham) from the football team . . . and never would have imagined anything like this."