On Monday, a former business associate of Tommy Tuberville was sent to the state penitentiary for defrauding investors millions of dollars.
Circuit Judge Jacob A. Walker III sentenced John David Stroud, 42, of Auburn to 10 years in prison Monday morning during a sentencing hearing, in addition to denying probation. Stroud had previously pleaded guilty to fraud securities trading and was ordered to pay over $2.14 million to 12 investors.
At the time of his plea, Alabama Securities Commission Director Joseph Borg said he was pleased with how Stroud confessed to what he had done.
“This conduct will not be tolerated and today’s plea demonstrates the continued efforts of the Alabama Securities Commission and the Lee County District Attorney’s Office to investigate and prosecute those who commit these financial crimes,” Borg said in a written statement.
Stroud was indicted by a grand jury in May 2012 with 10 counts of theft by deception, seven counts of investment fraud, two counts of failing to register with the Alabama Securities Commission and two counts of securities fraud.
The ASC alleged that Stroud falsely portrayed himself as a commodities trader and raised $5.2 million between 2008 and 2012 through various Auburn investment companies, using the money gained to pay back returns to other investors and for personal and unauthorized business expenses. Tuberville, who served as head football coach at Auburn University from 1999 to 2008, was not part of the Lee County criminal case.
Stroud is also the subject of a federal lawsuit brought by seven investors claiming he lost them $1.7 million. Tuberville, who had previously been named in the suit, settled the lawsuit and was dropped from the case. Details of the settlement were not disclosed.
No one from the ASC or Stroud’s attorneys were available for comment.