ATHENS — The day started with Jim Donnan’s former business partner taking the stand and evading questions. It wrapped up with two of Donnan’s former Georgia football players describing their financial losses after investing with their former head coach.
Donnan, the Bulldogs’ head coach from 1996-2000, is on trial on 41 counts related to mail fraud, wire fraud and conspiracy, as part of what the federal government says was an $81 million Ponzi scheme.
Thursday, the court heard from Gregory Crabtree, who has pleaded guilty to one count of conspiracy and faces up to five years in prison. While there are many big names on the witness list — including two who testified later in the day — perhaps the key one is Crabtree.
Wearing a yellow sweater and speaking softly, Crabtree took the stand after a couple days of his character being pummeled by previous witnesses. A little more than an hour before Crabtree took the stand, Jim Burritt, the former chief restructuring officer for GLC, admitted he once described Crabtree as “a pathological liar.” Former ESPN executive Daniel Shoemaker testified Wednesday that Crabtree had taken his money for a plan to buy and re-sell Christmas toys but never bought the toys.
But prosecutors tried to use Crabtree’s testimony to show that Donnan was intimately involved in GLC, rather than just a well-meaning investor who was duped, as the former coach’s lawyers say.
Crabtree testified that while GLC was in business, he and Donnan spoke “every day.” Then prosecutor G.F. “Pete” Peterman asked how often Donnan visited their stores, which contained the liquidated merchandise that GLC was supposed to sell.
“Every few months,” Crabtree said.
Crabtree said the business “took a downturn” in late 2009, and investor money was “coming in quicker than I could move the merchandise.” Crabtree claimed he then suggested slowing down the investor rates and told Donnan he was having trouble moving the merchandise.
Crabtree was asked whether Donnan knew what was going on with the accounts.
“Yes, I told him,” Crabtree said.
At one point during Crabtree’s testimony, Donnan closed his eyes and shook his head.
Crabtree has admitted that he was paying off investors by taking in new investors. Peterman asked Crabtree if knew what that was.
“I do now,” he answered.
And what is that, the prosecutor asked?
“A Ponzi scheme,” Crabtree said.
Later, a handwritten letter by Donnan was introduced into evidence by the prosecution. Donnan drafted it, and Crabtree signed it in November 2010. The gist of it was that Donnan did not know what Crabtree had been doing. Crabtree testified that Donnan told him the letter was “to help me save face with my friends.”
When cross-examination began, Jerry Froelich, one of Donnan’s lawyers, tried to go after his credibility, pointing to his numerous bank accounts, his actions running GLC and spending its money, some of it on personal items.
Froelich produced a document that it claimed showed Crabtree in October 2010 projecting a $31 million profit for the previous year. Crabtree appeared confused and said he wasn’t sure about the document and didn’t know where it came from. Later, Crabtree denied preparing a profit projection that Froelich said was from Crabtree.
But Crabtree didn’t have much to say, often answering that he didn’t remember, and Froelich ended up doing most of the talking. Donnan’s attorney hammered away at all the money Crabtree told investors he could make on selling liquidated merchandise.
Earlier in the day, Burritt said he found documents in Crabtree’s desk that he said were from Donnan. Burritt called the day they found those documents “to be an important day.”
“I realized that at that point in time that Mr. Donnan had had greater involvement than I had anticipated before that,” Burritt said.
The prosecution eventually moved on to trying to show the impact of the situation, calling former Georgia and NFL players Jonas Jennings and Kendrell Bell.Jennings told the court he saw Donnan as a father figure, calling him after he retired from the NFL in 2009 to talk about possibly going into coaching.
“He just told me that he had a better opportunity that would put me on Easy Street,” Jennings said.
Jennings invested $500,000 in February 2010, then eight months later $300,000 more at Donnan’s urging.
“All I heard was ‘guaranteed’ coming from a guy I knew well,” Jennings said.
At first he received some payouts, but then they stopped coming and Jennings contacted his coach.
Bell lost a total investment of $1 million, although he recouped about half of it through legal proceedings. Bell said he saw Donnan as a coach “who looked out for the players.” When his financial adviser told him Donnan had an investment opportunity for him, he signed on, and Donnan implied it was a no-risk situation and would personally refund any lost money, Bell told the court.
But in late 2010, Donnan called Bell and said things were falling apart.
Note: Information from the Associated Press was used in this report.