Ex-Rovers midfield star Michael McIndoe was behind the scheme which saw scores of big name players lose cash.
The player, who also starred for Coventry City and Wolverhampton Wanderers during his career, is now believed to be living in France while footballers caught up in the Ponzi scheme are now chased by lawyers to repay money they received.
The investment scheme promised a huge 20 per cent-a-month return but crashed amid huge debts, with individual losses ranging from a few thousand pounds to more than a million.
Fraud squad detectives conducting an ongoing investigation believe Scots-born McIndoe, 36, is now living in the south of France, where he still enjoys a lavish lifestyle.
According to the Daily Mirror, McIndoe lured people in telling them he had a miracle scheme investing in gold, stocks and London property offering massive returns each month.
Initially, early investors were paid handsome dividends - but it soon emerged the McIndoe plan was a simple 'Ponzi' scheme, named after a swindler who made a fortune through fraud in America and Canada in the 1920s.
Former Spurs striker Robbie Keane , Hull midfielder Jimmy Bullard and Aston Villa winger Gabby Agbonlahor are among those understood to have lost out.
The newspaper reported that demand letters are being sent out by lawyers acting for creditors after McIndoe was made bankrupt with £3million debts. One former player is expected to be hit for a staggering £1.6million.
A source revealed: “They are being given just 14 days to return the money. People have already been stung by this scam and now even more are.”
McIndoe scored 28 goals in 122 appearances for Rovers between 2003-06 and helped the side to the Division Three title in 2003-04.