Donald V. Watkins approached millionaire athletes with an investment opportunity.
The former civil rights lawyer told them his companies, Watkins Pencor and Masada Resource Group, could turn organic waste into fuel, and would soon reap millions, if not billions, of dollars, according to a complaint filed last week by the federal Securities and Exchange Commission. Watkins said that a multinational trash company, Waste Management Inc., was preparing to buy him out, then later claimed a Saudi Arabian prince was interested, the complaint says.
An NFL player handed him $1 million. Another football player gave him $500,000. A former NBA player gave him $2 million.
They were duped, the feds allege. Watkins, a former Alabama attorney who lives in Midtown, actually put their money toward his massive debts, alimony payments and overdue taxes. He also sent money to his girlfriend and paid for a personal airplane, the lawsuit says.
The SEC won’t name the athlete investors. But, based on other pending litigation, one of them apparently is Bryan Thomas, a former New York Jets linebacker who played college ball at the University of Alabama-Birmingham.
Thomas and his wife invested $1 million, and Thomas is now locked in litigation with Watkins in New Jersey federal court. The complaint in that lawsuit says Watkins falsely told the linebacker that former Secretary of State Condoleeza Rice was joining Madada as an adviser who would work under Watkins’ supervision, and that Martin Luther King III had requested a meeting with President Barack Obama at Camp David to talk about Masada.
A section of the SEC complaint, apparently describing Thomas, says that when the “NFL investor” handed over the $1 million, Watkins’ bank account had a negative balance of about $4,500. About $500,000 of the athlete’s money went to refund a law client; more than $166,000 went toward Watkins’ debts from his partial ownership of Alamerica Bank; more than $41,000 went toward an American Express bill; $25,000 went to Watkins’ then-girlfriend; nearly $21,000 went toward a personal plane; and $14,500 went to his ex-wife.
Watkins, who was once a legal adviser to former Birmingham Mayor Richard Arrington, is hurling his own accusations back at the SEC.
Watkins preemptively sued the agency last year, seeking a halt to the investigation. Watkins said he was being retaliated against because of his online criticism of Alabama Gov. Robert Bentley and others, and he accused the SEC of failing to look at documents that would exonerate him.
“The SEC’s lawsuit is paper thin, bogus and malicious,” Watkins wrote in a Facebook post earlier this week. “I will not let the SEC’s lawsuit intimidate me or chill the exercise of my First Amendment right to criticize ethically challenged public officials, or anybody else.”
In another Facebook post, Watkins said one of Thomas’ attorneys is a former SEC colleague and personal friend of Walter Jospin, regional director of the SEC’s Atlanta office. He says Jospin is leading the SEC’s efforts, but has a conflict of interest and should recuse himself.
“The SEC has never been interested in learning the truth about my businesses, their global reach, their value, or me,” Watkins’ post says. “Instead, rogue officials within the SEC have hijacked the agency’s investigatory powers and complaint process for malicious purposes.”
Jospin worked for the SEC in the early 1980s, then re-joined the agency as a regional director in 2015, according to a press release. According to Watkins’ lawsuit, the SEC began targeting him in 2013.
The SEC’s complaint accuses Watkins of violating federal securities laws and an SEC anti-fraud rule. The suit seeks a permanent injunction, civil penalties and the return of allegedly ill-gotten gains with interest.