Bauerle stands behind Donnan despite financial loss

semerson@macon.comMay 9, 2014 

ATHENS - Georgia swimming head coach Jack Bauerle, on proverbial trial by the NCAA, was called to the stand Friday in the real trial of Jim Donnan, his friend and Georgia’s former football head coach.

Bauerle lost $100,000 he invested with Donnan in what federal officials say was a Ponzi scheme. And yet when he was called by the prosecution Friday, Bauerle stood behind Donnan.

“I trust Jim totally. He had my best interests involved,” Bauerle said on the witness stand. “I think that was the only reason I was involved.” Donnan broached the idea of an opportunity on a tennis court in 2010. Donnan told him there would be a 60 percent return on the dollar, “give or take.” Instead, he lost the entire investment, later recovering around $12,000-$15,000 after going through bankruptcy court.

“The bottom line was Jim was just trying to help me out financially,” Bauerle said. “I just trusted Jim. I didn’t ask much about the business. I just thought it was about some surplus goods or something.”

It was still a massive loss on the investment, which Bauerle made to Donnan the summer of 2010, as the business he and partner Gregory Crabtree ran was unraveling.

But Bauerle harbors no ill feelings. Defense attorney Ed Tolley asked Bauerle whether he remained close friends with Donnan despite the financial loss.

“Probably closer,” said Bauerle, who has led Georgia’s women’s swimming team to six NCAA championships, including this year and last year.

Donnan, 69, is on trial on 41 counts of fraud related to what the federal government said was an $81 million Ponzi scheme. The company collapsed in late 2010, costing investors millions, as well as Donnan, according to his lawyers.

Bauerle is currently suspended by the NCAA over allegations that he made “special arrangements” to help one of his male swimmers pass a class. He is awaiting a ruling from the NCAA on his future, which is likely to come in August. For that reason, the longtime coach was reticent to say much after the hearing when approached by media.

But again, he stood by Donnan.

“I just trusted Jim, and I don’t think he would have done anything to hurt his friends,” Bauerle said.

It was a different story earlier on Friday, when another investor took the stand.

David Allen, a urologist in Athens, testified that Donnan talked him into investing $1 million of family savings, which was later lost.

Allen said he had been friends with Donnan since Georgia hired him in 1996. More than a decade later, Allen became an investor in ill-fated GLC after Donnan and Allen ran into each other at a Five Guys Burgers and Fries restaurant in Athens.

“Jim mentioned he was into a new business endeavor and was doing quite well,” Allen said Friday.

A few months prior to GLC’s collapse, Donnan called Allen to solicit another investment, Allen testified Friday. Donnan told Allen to say he had a “very important” investment that included five other investors, two others of whom had not been able to fulfill that part of it.

“Jim asked that I be able to help pick this up so the investment would go through and he would not be harmed significantly,” Allen said.

Allen said he had $1 million set aside for at least a decade, and he initially told Donnan that the money wasn’t available to anybody but his family. So he turned Donnan down.

But Donnan eventually called back, sounding distraught to Allen, saying the situation could affect him badly and cause the loss of his house, Allen testified.

“I subsequently invested,” Allen said.

Jerry Froelich, one of Donnan’s attorneys, then began his cross examination by bringing up a past statement by Allen that he had helped run a hedge fund out of college. That led to a contentious exchange that the judge finally put to an end, telling Froelich to move on.

Allen later testified that Nelson Bowers, another investor, called him to say that “Jim is in trouble, and we need to help him.”

Several other investors in GLC testified Friday, including former Virginia football head coach Dick Bestwock, who lost $40,000 on his family’s investment. Edd Price, an Athens resident, said he lost more than $1 million.

The court also heard from Valerie Fennell, widow of Stephen Fennell, who died in May 2011. Stephen Fennell invested most of their retirement savings, which were lost.

Donnan and his defense have blamed GLC’s founder, Gregory Crabtree, for duping the former coach and running a Ponzi scheme. Donnan’s side argues that he was just the first investor in GLC and recruited investors in the genuine belief that GLC would work.

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