Stoops linked to alleged scheme
Stoops linked to alleged scheme

By Randy Ellis

Published: June 19, 2007

University of Oklahoma football coach Bob Stoops confirmed Monday he invested in an online digital music business that federal regulators now allege is an illegal pyramid scheme.

"Even though this investment was less than $500, like all others I make, it was reviewed by a trusted and experienced group of legal and financial advisers,” Stoops said Monday in a statement released by OU. "I have been and remain comfortable with the direction they have provided for many years.”

Kenny Mossman, OU associate athletics director, said Stoops did not say how much money he made off the investment or whether he recruited other coaches or players to participate.

The Federal Trade Commission filed a complaint June 6 alleging that BurnLounge Inc. is operated as an illegal pyramid scheme.

FTC attorneys said BurnLounge touted the participation of major music and sports celebrities such as singer Justin Timberlake and professional basketball star Shaquille O'Neal as validation of its offerings.

Stoops is not named as a defendant in the FTC lawsuit against BurnLounge, but his name surfaced Sunday when a Columbia, S.C., newspaper quoted former OU receivers coach Steve Spurrier Jr. as saying he invested in BurnLounge a year ago after Stoops introduced him to the concept.

"When Bob Stoops got me, he said, ‘I've spoken to a lawyer about this. I've spoken to my agent. I've spoken to some people to find out if this is a legitimate thing. And everything they told me, this is a legitimate (business). Put your name on it and go do it,' ” said Spurrier Jr., who is now a receivers coach for the University of South Carolina Gamecocks.

Stoops declined to comment on Spurrier's remarks, referring questions to Mossman.

BurnLounge was not promoted on OU Web sites, Stoops and Mossman said.

BurnLounge touted itself as possessing software that would let participants open their own digital download stores and sell music to online friends. The FTC alleges it was operated as an illegal pyramid scheme, with participants at the top of the pyramid making money by recruiting new participants who would pay fees to open stores.

BurnLounge announced Monday that its chief executive officer had resigned and a replacement had been appointed.

In a statement on its Web site, BurnLounge has said: "BurnLounge is working with retailers, investors and partners to ensure that our business continues uninterrupted. The founders of this company are working with the FTC to try and resolve any issues and address any concerns that the FTC has with this industry or our business.”

Contributing: Nolan Clay and Brian Sandalow, Staff Writers