Texas Tech coach accused of investment fraud

Texas Tech coach Tommy Tuberville has been sued in federal
court, accused of defrauding investors out of more than $1.7
million in Alabama following his tenure at Auburn.

A federal lawsuit filed Friday in U.S. District Court in
Montgomery, Ala., names Tuberville, John David Stroud and eight
investment entities as defendants, claiming the two men ”employed
devices, schemes, and artifices to defraud” seven plaintiffs from
Arkansas, Alabama and Tennessee.

The lawsuit said Tuberville and Stroud misappropriated assets,
and falsified client statements and fund performance reports as
they ”unjustly enriched themselves” at the expense of the
investors.

Tuberville, who spent two seasons away from coaching after
leaving Auburn in 2008, released a statement through his attorney,
Vic Hayslip of Birmingham, Ala. Tuberville was ”surprised” at the
lawsuit and has never even met or spoken with most of the
plaintiffs, the statement reads.

”He categorically denies any wrongdoing which has been
attributed to him in this suit,” Hayslip’s statement says. ”Coach
Tuberville absolutely never solicited any investment from any of
these or other individuals.”

The statement also said Tuberville invested significant funds
and has not gotten any return. He intends to defend the allegations
against him and is confident he’ll be exonerated, the statement
says.

A woman who answered the phone at Stroud’s home in Auburn said
he wasn’t there and she didn’t know how he could be reached.
Plaintiffs’ attorneys declined comment Tuesday.

Tuberville and Texas Tech agreed to a five-year, $11 million
contract after last season that included a $500,000-a-year
raise.

The lawsuit, which seeks unspecified compensatory and punitive
damages, said Tuberville told Baron Lowe and Glen Williams in late
September that all of the investors’ funds would be returned to
them, and that Stroud indicated that they’d get their money back
before Oct. 7, 2011. Most of them have requested return of their
money in writing but haven’t been repaid, the suit said.

The suit contends that Tuberville and Stroud ”intentionally or
recklessly made untrue statements of material facts and omitted to
state material facts … to induce plaintiffs to purchase interests
in the hedge fund or funds operated and managed by
defendants.”

Tuberville and Stroud cofounded TS Capital Management, according
to the suit, which said Tuberville was ”responsible for the
investment direction, capital raising, and the day-to-day oversight
of business decisions of TSCM.”

Tuberville and Stroud, who were described as equal partners in
the firm, didn’t file federal or state income tax returns in a
timely fashion and weren’t registered to do business in Alabama,
according to the suit.

The suit said that John and Priscilla Abrams of Wetumpka, Ala.,
invested more than $745,000 and that Baron and Melanie Lowe put
more than $532,000 into the funds, including the college accounts
of their two children worth some $61,000.

Debra Clark of Lake Village, Ark., ($284,345), Fredrick Williams
($120,005) and Kristy Williams ($18,921) of Auburn are the other
defendants.