LUBBOCK, Texas (AP) - 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.
