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Houston Chronicle:

Basketball booster David Salinas, his companies and an associate engaged in "fraudulent schemes" with more than $50 million in investors' money, including sales of bogus corporate bonds and loans to affiliated companies, regulators alleged in civil documents Monday.

Salinas committed suicide last month as regulators began investigating the alleged scheme that reportedly included prominent college coaches among its victims.

Sports Illustrated, citing a list provided to investigators, has reported that coaches who invested with Salinas included Baylor football coach Art Briles and former or current basketball coaches Lute Olson of Arizona, Scott Drew of Baylor, Billy Gillispie of Texas Tech, Doc Sadler of Nebraska, and Willis Wilson, formerly of Rice and now coaching at Texas A&M-Corpus Christi.

Wilson, who had $642,000 invested with Salinas according to the magazine, did not return a phone message Monday.

In 1992, Salinas founded Houston Select Basketball, whose teams have won more than 12 AAU titles, according to its website. He also was a donor to University of Houston and Rice athletics.

In a lawsuit filed Monday in U.S. district court in Houston, the U.S. Securities and Exchange Commission alleged that Salinas, his companies and Brian A. Bjork, 43, of Missouri City, sold fake corporate bonds.

The SEC also alleged in its civil suit that Bjork's firm, Select Asset Management, created two private funds that raised $13.9 million from investors without telling them the funds made loans to affiliated companies — including $2 million to Selected Market Insurance Group, a company owned mostly by Salinas.

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Process could take years

Former federal prosecutor Philip Hilder, a Houston attorney who specializes in white-collar crime cases, said Monday's civil filings are early steps in a process that could take several years . Recovery is always spotty, and investors never get paid back the full amount lost, he said.

Former Rice basketball player Jason Skaer, who had $129,500 invested in bonds, said Bjork negotiated his first professional contract after Skaer completed his senior season at Rice in 1999.

Houston White Collar Criminal Defense Attorney Philip Hilder in the Houston Chronicle

Skaer, now the pastor of The Church at Alden Bridge in The Woodlands, said he received a one-sheet monthly statement detailing his investments with Select Asset Management, including those made through J. David Financial.

"You would see definite companies you know and trust listed there at the rate of return, what it had done historically, and so it looked like it was held in specific funds just like the rest," Skaer said. "As it turns out, that was just a fabrication."

Skaer said he and his wife, who just gave birth to their second child, hope they may recoup some of the money.

"But at this point, we're kind of preparing ourselves to lose it all," he said.

http://www.chron.com/disp/story.mpl/business/7678901.html

Copyright 2011 Houston Chronicle