Ex-UGA coach Donnan's co-defendant set to testify

by KATE BRUMBACK, Associated Press

alt

On Thursday, jurors are expected to hear from Gregory L. Crabtree, Donnan’s alleged co-conspirator who has already pleaded guilty to one count of conspiracy to commit fraud and is expected to testify on the prosecution’s behalf.


ATHENS, Ga. (AP) — A man accused along with former University of Georgia football coach Jim Donnan of operating a fraudulent investment scheme testified Thursday that Donnan asked him to sign a document saying Donnan wasn't aware that investor money was being used to pay other investors.

Gregory Crabtree's testimony came during Donnan's trial on federal charges including conspiracy, mail fraud and wire fraud. Crabtree pleaded guilty last month to a single count of conspiracy

A federal indictment against Donnan, of Athens, and Gregory L. Crabtree, of Proctorville, Ohio, says the pair ran a fraudulent investment scheme from 2007 to 2010 through GLC, a West Virginia-based company that dealt in closeout merchandise. Prosecutors have said Crabtree ran the day-to-day operations and Donnan used relationships of trust to lure investors into the fraud scheme.

Donnan presented a document to Crabtree in late 2010, after the scheme had unraveled, in which Crabtree was to certify that the ex-coach did not know that investor money was being used to pay other investors. Crabtree said Donnan said to him, "Would you care to sign this letter to help me save face with my friends?"

When Crabtree pointed out that Donnan had been aware of the way the payments worked, Donnan acknowledged that but said he needed Crabtree to sign the document so he could save face and try to salvage some of the business, Crabtree testified.

Crabtree and Donnan began working together after a mutual friend put them in touch. Crabtree had some opportunities to buy wholesale or closeout merchandise but didn't have the money to buy it. After Donnan provided the capital for several deals and got a good return, he asked Crabtree if there were more opportunities because he knew other people who would be interested, Crabtree testified.

They began working together, talking every day, Crabtree said.

In late 2009, problems started as Crabtree was having trouble moving merchandise and started stocking it in warehouses because investor money was coming in faster than he could sell it. He spoke to Donnan about the troubles, and Donnan said he'd look into ways to help, Crabtree said. They ended up using investor money to pay other investors because they didn't have profits from sales to pay the high returns Donnan had promised investors, Crabtree said.

"Do you realize what that is, what that's called?" prosecutor G.F. "Pete" Peterman III asked Crabtree.

"I do now," Crabtree said.

"What's that?" Peterman asked.

"A Ponzi scheme," Crabtree said.



More Local

Drug suspect seeks refuge at home of off-duty officer

When fleeing from the police, make sure you don’t unknowingly try and get help from an off-duty police officer. But that’s what ... Read More


Communication breaks down in Grantville

Monday’s Grantville City Council meeting was almost over before it even started. Council Member Barham Lundy called for the meeting to ... Read More


Sells to seek re-election

Grantville Mayor Jim Sells has officially qualified to run for a second term as mayor of Grantville. His qualifying Monday comes less than o ... Read More


Persons of interest sought in slaying

The Meriwether County Sheriff’s Office and the Georgia Bureau of Investigation are still investigating a slaying that occurred in Meri ... Read More


Woman tries to slip marijuana to inmate

A woman was arrested Saturday after authorities at the Coweta County Jail caught her attempting to pass marijuana and tobacco along to an in ... Read More

Man arrested for hiding LSD in shoe

After two men charged with the possession of marijuana were transported to the Coweta County Jail Friday, authorities discovered one of them ... Read More