ATHENS -- On the second day of Jim Donnan’s trial, it became clear that a man not yet in the courtroom would be central to the fate of the former University of Georgia head football coach.
But that man is due to enter the courtroom Thursday.
Donnan is standing trial on charges relating to what federal officials say was an $81 million Ponzi scheme to defraud investors. Donnan, who coached Georgia from 1996-2000 and still lives in Athens, is charged with 41 counts relating to mail fraud, wire fraud and money laundering. Gregory Crabtree, who was Donnan’s former partner in GLC, the pair’s investment company, has already pleaded guilty and is due to be sentenced next month.
The prosecution plans to call Crabtree to the stand Thursday. A day earlier, however, one of their own witnesses may have been more helpful to Donnan.
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Daniel Shoemaker, a former ESPN executive, introduced Donnan to Crabtree in early 2007. When Shoemaker found out that Donnan and Crabtree had partnered up to form GLC, Shoemaker claimed he warned Donnan about Crabtree’s ability to run something of that size.
“I remember telling Jim one time: ‘Don’t let this thing get too big, because I know he can’t run it,’ ’’ Shoemaker said.
Shoemaker said he was never asked to invest in GLC, although in 2010 he was asked by Crabtree to participate in a separate investment, on purchasing Christmas in the spring to be re-sold in the fall. Shoemaker agreed to invest $50,000, and didn’t get any of it back.
Then Shoemaker volunteered that he later found out that Crabtree never purchased any of the Christmas toys.
The prosecution is arguing that Donnan, now 69, recruited numerous investors, including big names in college sports such as Mack Brown, Tommy Tuberville, Frank Beamer and others. Checks from Mark Gottfried, now head men’s basketball coach at North Carolina State, were introduced into evidence during Wednesday’s testimony.
Shoemaker recently retired from ESPN as vice president of collegiate development. He lived most of his life in West Virginia, where he met Crabtree in the late 1990s.
“I think I’ve always had a soft spot for people who tried really hard and never seemed to get ahead,” Shoemaker said. “I always liked him. I thought he was a good guy, for the most part.”
Shoemaker said he knew Donnan “quite well” after first meeting him when Donnan was introduced as Marshall University’s head football coach in 1990.
When Donnan was fired by Georgia, Shoemaker had by then moved on to ESPN and began working with Donnan.
When the Marshall job opened up again, Shoemaker lobbied the school to rehire Donnan.
Nelson Bowers, one of the GLC investors and a former Georgia football player, was the next witness. Bowers now lives near Chattanooga, Tennessee, and owns nine automobile dealerships, a radio station and a health care company.
Under cross-examination by Donnan’s lawyers, Bowers said Crabtree told him he had paid back investors by accepting other investor’s money, and that Donnan did not know about it.
The final witness of the day was Jim Burritt, who was brought on late as the chief restructuring officer for GLC. Burritt painted the picture of a disorganized operation that he knew right away was committing fraud, paying off previous investors by taking new investors’ money.
GLC was set up in front of a Dan’s Sports Shop in Huntington, West Virginia. GLC also did not have a budget or a financial plan, Burritt said, nor did it have adequate staff or produce “meaningful” financial statements. Crabtree’s office didn’t have a computer in it. There was no method to track inventory, and instead it was an unorganized warehouse.
What did they sell? Crabtree told Burritt it was “anything from toys to Cadillacs.”
“I never found the Cadillac,” Burritt said. “But I got the idea when we toured the warehouse.”
And none of GLC’s business were profitable on a year-round basis.
“The business wasn’t a viable operating entity,” Burritt said. “My opinion is that it was never a real business. It never acted in a way that you would expect a business to act, to do the work you would expect a business to do.”
The only real source of income for GLC was its investors, Burritt said.
Burritt was later asked how Crabtree described his relationship with Donnan.
“He said that they had worked together over time, that they had a cordial relationship,” Burritt said. “I remember that one of the ways he said it is, ‘We kind of partnered up.’ ’’