Former University of Georgia head football coach Jim Donnan is scheduled to go to trial on criminal charges of mail and wire fraud Tuesday in a federal courthouse about a mile from Sanford Stadium.
The trial, expected to last two to three weeks in U.S. District Court in Athens, stems from Donnan’s indictment 13 months ago on charges related to an alleged scheme in which investors lost almost $23 million.
Donnan has pleaded not guilty to the charges.
Flanked by his attorneys, Ed Tolley of Athens and Jerry Froelich of Atlanta, Donnan sat quietly through an hour-long pre-trial conference in the courtroom late Monday afternoon.
Donnan and his attorneys declined to comment to reporters after the hearing. “We’re not talking — too close to the trial,” Tolley said.
Jury selection is scheduled to begin Tuesday morning. A pool of 100 prospective jurors has been summoned.
Donnan, 69, is one of just four UGA head football coaches in the past 50 years. He held the job from 1996 through 2000 and was replaced by Mark Richt.
The matter that has Donnan in court this week first made headlines in 2011 when he filed for bankruptcy protection amid a flurry of litigation surrounding a West Virginia-based company named GLC Limited, which was founded by Gregory Crabtree in 2004 and operated retail discount stores. Donnan’s relationship with Crabtree and GLC began in 2006 or 2007, according to prosecutors.
A revised 47-count indictment of Crabtree and Donnan stated that they promised investors returns of 50 to 200 percent from profits generated by GLC’s purchase and resale of close-out or discontinued merchandise. But “because GLC had little income other than the money provided by investors … money from new investors was continually needed to pay GLC expenses, to pay Crabtree and Donnan, and to perpetuate the scheme by paying what was falsely represented to investors as being a return on their investment from sales,” according to the indictment.
Donnan’s lawyers previously have said any representations he made to investors were based on what he was told about the business and believed to be true.
Crabtree last month decided not to go to trial, pleading guilty to a single count of “conspiracy to commit fraud in the sale of a security.” His plea agreement states that he could face a maximum sentence of five years in prison. It says he is not required to “implicate” or “make a case” against any individual, but is required to “testify truthfully whenever called upon.” Crabtree’s sentencing is scheduled for June 24 in Athens.
Prosecutors on Monday dismissed six of the 47 counts against Donnan, saying they were primarily related to conduct committed by Crabtree.
A motion by Donnan’s attorneys to dismiss an additional count was denied by U.S. District Judge C. Ashley Royal during the pre-trial conference later Monday.
In previous legal filings and media reports, GLC has been described as a “Ponzi scheme.” Donnan’s lawyers last week filed a motion asking the judge to bar prosecutors from using that term at trial, arguing GLC “was not insolvent from its inception and thus should not be defined as a Ponzi scheme.”
The indictment alleges that, from 2007-2010, Donnan and Crabtree raised about $81 million from 94 investors, many of them from the Athens area or well-known sports figures (including Virginia Tech football coach Frank Beamer, University of Cincinnati football coach Tommy Tuberville, former Dallas Cowboys coach Barry Switzer and former Georgia football player Kendrell Bell).
GLC used only about $11 million to purchase goods for re-sale, and investors ultimately lost $22.9 million, according to the indictment.
Donnan contributed about $4.8 million to GLC and realized a personal gain of about $8.4 million, the indictment states.
Donnan posted a 40-19 record at Georgia. He hasn’t coached since, but he was inducted into the College Football Hall of Fame in 2009, mainly for his 64-21 record and four appearances in the Division I-AA (now called FCS) national title game as head coach at Marshall from 1990-95.
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