A private equity firm co-founded in 2007 by former San Francisco 49ers quarterback Steve Young has been accused of covering up a massive fraud at one of its portfolio companies. The accusations, which came in the form of a civil suit filed by the acquirer of the firm where the fraud allegedly took place, have prompted the FBI to investigate, potentially placing Young, his partners and his employees in hot water, per the New York Post.

HGGC, where Young is a managing director, purportedly helped falsify test results at Citadel Plastics, according to the lawsuit, which was brought by plastics manufacturer A Schulman, which bought Citadel in 2015 for $800 million.

The PE firm, HGGC (which was formerly known as Huntsman Gay Capital Partners), where Young is a managing director, "falsified test results" at its Citadel Plastics company, according to a lawsuit filed by rival plastic manufacturer A. Schulman, which bought Citadel for $800 million in 2015. Citadel allegedly had been selling products with the claim that they met Underwriters Laboratories specs, when they did not, according to court testimony. A civil trial over the alleged fraud started in April, and Judge Travis Laster is expected to rule on the liabilities portion of the suit as early as the end of this month.

Schulman, is seeking damages of up to $275 million. What's worse, federal investigators are probing the alleged fraud. Already, the FBI has issued more than five subpoenas.

Federal investigators are also probing the alleged antics at Lucent Polymers — purchased by HGGC’s Citadel in 2013, court papers reveal. The FBI has issued more than five subpoenas in the matter. Young was not among those subpoenaed — nor is he one of the executives named in the suit, although his PE firm is.

The lawsuit "came back into focus" last week after Young - a hall of fame quarterback - said during an interview that his firm's strengths include its ability to form partnerships with its portfolio companies.

Schulman’s 2016 lawsuit came back into focus last week after Young said in a TV interview that a major ingredient of his PE firm’s recipe for success is forming partnerships with its portfolio companies. "We’re really attacking the market in an old-school way: We really look for partnership," Young, known for his stand-out years as a San Francisco 49er, told CNBC.

HGGC has denied knowledge of the fraud, arguing that its role has been to provide "financial oversight" of Citadel, as well as "helping with M&A. An executive director at the firm also said he didn't notice any "red flags" when he served as chairman at Citadel.

"I think there is a certain level of arrogance at HGGC that surprises me," said one source close to Schulman, who said Young’s TV appearance caught his attention. In the court battle, Schulman claims HGGC at least knew about the potential for fraud at Lucent because the PE firm’s Citadel team flagged potential problems with the highly profitable Lucent product lines, according to court filings. HGGC Executive Director Gary Crittenden, who was also chairman of Citadel, said during court testimony that he did not see any red flags at Lucent when the company was bought - or during the period it owned it.

The trial started in April, and a ruling on whether HGGC is liable for the fraud could be handed down in the coming weeks.