Former Ga. Regent Dean Alford ran $6 million Ponzi scheme, suit says

Former Ga. Regent Dean Alford ran $6 million Ponzi scheme, suit says

The investors said they were assured the energy project would be profitable, and that the man behind it, Dean Alford, had exemplary credentials.

Alford was a former state lawmaker and was, at the time, on the powerful Georgia Board of Regents, which sets policy for the state’s largest public colleges and universities.

But a civil lawsuit filed Friday by 39 investors says Alford swindled them out of nearly $6 million in what they describe as a Ponzi scheme.

The lawsuit is the latest legal trouble for Alford, 66, who resigned his seat on the board earlier this month the same day he was charged with filing false paperwork and forging a university employee’s signature to try to get about $2.2 million for his Rockdale County-based business, Allied Energy Services.

> RELATED: Former Ga. Regent turns himself in on fraud charges

About a dozen others, including Alford’s wife, were named as defendants in the lawsuit, but the investors say Alford was the main character in the alleged scam. In all, there were 436 investors, the lawsuit complaint says. Most of the plaintiffs live in Columbus, Georgia.

“Defendants’ fraudulent scheme was to … steal a portion of the Plaintiffs’ money, conceal the theft through deceit, including, without limitation, fraudulent investments, business entities and documentation and misrepresentations, and use the funds for their own lavish lifestyle,” said the complaint, filed in U.S. District Court in Middle Georgia.

Efforts to reach Alford through Robert E. Wilson, a former DeKalb County district attorney who is representing Alford in the criminal case, were unsuccessful Monday. Wilson has said he and Alford are cooperating with the investigative effort, but declined to offer details.

Alford’s wife, Debbie Dlugolenski Alford, and her son, David Dlugolenski, also a defendant, are “shocked at these allegations,” their attorney, Kevin L. Ward, said Monday. “They know nothing about the facts alleged.” The complaint says the two knew or assisted Alford. Dlugolenski Alford, the former chief executive of the Georgia Lottery, filed for divorce after the criminal charges, Ward said.

David Dlugolenski left the company in 2015, said Ward, who added he’s trying to remove David and his mother from the lawsuit. Ward noted the investments in the project began in 2018. Alford is the only name listed on the company’s annual registration with the Georgia Secretary of State’s office.

Alford’s company was founded in 1977 and worked on several projects in Georgia. In June 2018, Alford’s company announced plans to build a waste-to-energy plant at the city of Augusta’s landfill. The facility would convert up to 175,000 tons of trash a year into pinkie-sized pellets that can be burned as biomass fuel or converted into building materials, The Augusta Chronicle reported.

The project costs were about $36 million, according to the lawsuit complaint. Unable to get funding from corporate partners and venture capitalists to build the plant, Alford and others “concocted a scheme to use individual investors to raise funds,” according to the lawsuit complaint. The biggest contributor, according to the lawsuit, was Chattanooga-based Dynamic W2E 12 LLC, which invested $1.4 million. Most investors said they contributed between $25,000 and $100,000.

While news reports said Alford’s company sought state and federal permitting for the project, the lawsuit complaint said that never happened.

The lawsuit says in an effort to pay back the people who put money in the landfill project, the defendants “furthered their fraud by concocting a Solar Energy project to gain additional investors.”

> MORE: Former UGA student pleads guilty to running Ponzi scheme

The initial investors said Alford either told them “the check is in the mail” or didn’t reply.

“In more recent days, Dean has continually represented to Plaintiffs that repayment of their money was imminent — however, to date, although demand of their return has been made, Defendants have yet to pay them,” according to the lawsuit complaint.

Some plaintiffs said they invested in Allied’s “Georgia Power Solar Farm Project,” but Georgia Power said Monday it has no affiliation with Allied.

The plaintiffs want their money back, including interest.

> RELATED: Ga. Regents member resigns amid criminal investigation

In the criminal case, Alford allegedly last month gave Versant Funding, a Florida-based business, purchasing agreements and fraudulent invoices for work he said was done by his company. Versant is a financial services sector that specializes in “factoring,” a financial transaction in which a business may sell its accounts receivable to a third party at a discount and pay a fee when the money is collected. Versant is a defendant in the civil case.

The invoices were for work Alford claimed his company did for the University of Georgia, officials said. The arrest report says there were also three invoices for Georgia Military College, two for Synovus and one for Inman Solar Inc., based in Atlanta. The invoices were sent between Sept. 20 and Oct. 1, the arrest report says.

Gov. Brian Kemp asked for Alford’s resignation when the criminal charges were announced. The governor has the authority to appoint Alford’s replacement, but has not yet chosen a successor.

Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.

Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.

X