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.

Receivership requested

The SEC asked the court to appoint a receiver to oversee the companies and to freeze the assets of the companies, Bjork and Salinas' estate.

The State Securities Board also took action in the case Monday, moving to revoke the security registrations of Bjork and Select Asset Management, which regulators allege sold bonds through Salinas' firm.

Matt Hennessy, a lawyer representing Bjork, said Salinas conducted all bond transactions for the J. David Group.

"Brian's knowledge of what David did came from David alone," Hennessy said. "Brian had no indication that David was deceiving his investors. Brian is shocked to learn of the degree of the deception."

Undated note produced

Hennessy provided an undated, handwritten note he says was found in Salinas' office and that appears to have been signed by Salinas. In the note, Salinas says Bjork and others "performed their duties with unknowing consequences which might occur. Their only task and goal was to meet the requirements I placed in front of them."

Salinas also takes responsibility in the note for "all transactions, correspondence, sales activities and telephone solicitations of all business activities."

Although Bjork served until earlier this year as an officer of J. David Financial, he told federal securities regulators his affiliation with Salinas was "not investment-related," according to the State Securities Board.

Bjork had a previous run-in with securities regulators in 2008, when the state board fined Select Asset Management $7,500 and ordered it to hire a compliance officer after determining the firm wasn't registered.

Salinas and J. David Financial were not registered with the State of Texas to do business as investment advisers, according to state regulators.

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.

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.

The Chronicle's Joseph Duarte contributed to this report.

purva.patel@chron.com

david.barron@chron.com