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Donnan Found Not Guilty on All Counts in Fraud Trial

By: WSAZ News Staff, The Associated Press Email
By: WSAZ News Staff, The Associated Press Email

UPDATE 5/16/14 @ 2:05 p.m.
ATHEN, Ga. (WSAZ) -- A jury has found former Marshall University football coach Jim Donnan not guilty in a federal fraud trial in Georgia.

It took jurors nearly three days of deliberating to return the not guilty verdict on all counts.

"I feel like I've been vindicated and hope to get my life back together," Donnan said following the verdict.

When the verdict was read, Donnan dropped his head in his hands and appeared emotional. He then stood and hugged his attorneys, according to a reporter for WXIA-TV who was in court.

Donnan faced 41 counts of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged ponzi scheme in which investors lost almost $23 million.

Prosecutors say the 69-year-old and Gregory Crabtree of Proctorville, Ohio ran a fraudulent investment scheme from September 2007 to December 2010 through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise. Prosecutors say the pair promised high rates of return but paid investors with other investor money.

Prosecutors have said Donnan used his extensive personal and professional network to lure investors.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security. As part of the plea deal, Crabtree testified against Donnan.

Donnan doesn't face prison time, but back in August 2011 he agreed to a settlement in the bankruptcy part of this case. At the time, he agreed to pay creditors of GLC more than $5M.

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UPDATE 5/16/14 @ 2 p.m.
ATHENS, Ga. (WSAZ) -- A verdict has been reached in the federal fraud trail of former Marshall University football coach Jim Donnan.

Details are expected to be announced shortly, according to reporters in the courtroom..

The trial is taking place in U.S. District Court in Athens, Ga.

Jury deliberations began Wednesday afternoon.

Donnan faces 41 counts of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged ponzi scheme in which investors lost almost $23 million.

Prosecutors say the 69-year-old and Gregory Crabtree of Proctorville, Ohio ran a fraudulent investment scheme from September 2007 to December 2010 through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise. Prosecutors say the pair promised high rates of return but paid investors with other investor money.

Prosecutors have said Donnan used his extensive personal and professional network to lure investors.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security. As part of the plea deal, Crabtree testified against Donnan.

If convicted, Donnan could face a potentially lengthy prison sentence.

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UPDATE 5/16/14 @ 1:15 p.m.
ATHENS, Ga. (WSAZ) -- Still no verdict in the federal fraud trial of former Marshall University football coach Jim Donnan.

The trial is taking place in U.S. District Court in Athens, Ga.

Jury deliberations began Wednesday afternoon.

Donnan faces 41 counts of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged ponzi scheme in which investors lost almost $23 million.

Prosecutors say the 69-year-old and Gregory Crabtree of Proctorville, Ohio ran a fraudulent investment scheme from September 2007 to December 2010 through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise. Prosecutors say the pair promised high rates of return but paid investors with other investor money.

Prosecutors have said Donnan used his extensive personal and professional network to lure investors.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security. As part of the plea deal, Crabtree testified against Donnan.

If convicted, Donnan could face a potentially lengthy prison sentence.

If the jury doesn't reach a verdict Friday, deliberations will continue on Monday. They won't deliberate over the weekend.

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UPDATE 5/15/14 @ 5:15 p.m.
ATHENS, Ga. (WSAZ) -- The third day of deliberations will begin Friday in the Jim Donnan fraud trial.

Donnan, former football coach at Marshall University, is on trial in Athens, Georgia.

He is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

The jury started deliberations late Wednesday afternoon. They deliberated for about three hours before going home at 5 p.m.

The jury deliberated throughout the day Thursday, before going home about 4:15 p.m., according to an Athens newspaper.

If convicted, Donnan could face a potentially lengthy prison sentence.

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UPDATE 5/15/14 @ 9:30 a.m.
ATHENS, Ga. (WSAZ) -- The jury has resumed deliberations in the fraud trial against former Marshall University Football Coach Jim Donnan in Athens, Georgia.

The jury started deliberating Wednesday afternoon and according to an Athens newspaper, the jury asked to go home around 5 p.m.

The paper reports that during deliberations Wednesday, the jury asked two questions. They asked when Donnan learned about the FBI investigation, and asked a question about a bank account.

Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

If convicted, Donnan could face a potentially lengthy prison sentence.

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UPDATE 5/14/14 @ 5:17 p.m.
ATHENS, Ga. (WSAZ) -- The jury in the Jim Donnan fraud trial in Athens, Georgia has gone home for the evening and will restart deliberations Thursday morning.

The jury got the case against the former Marshall University Football Coach Wednesday afternoon.

Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

The jury was sent home around 5 p.m. and will return at 9 a.m. Thursday.

If convicted, Donnan could face a potentially lengthy prison sentence.

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UPDATE 5/14/14 @ 2:50 p.m.
ATHENS, Ga. (WSAZ) -- The jury is deliberating in the fraud case against former Marshall University football coach Jim Donnan, according to published reports.

Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

The trial is taking place in Athens, Georgia.

The jury got the case Wednesday, following closing arguments from the prosecution and the defense.

The trial started last week.

If convicted, Donnan could face a potentially lengthy prison sentence.

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UPDATE 5/14/14 @ 11:15 a.m.
ATHENS, Ga. (WSAZ/AP) - Defense attorneys said former Marshall University football coach Jim Donnan was duped into a fraudulent investment scheme and invited his friends to join it because he thought it was a great opportunity.

Defense attorneys made the statements Wednesday in their closing arguments in Donnan's trial on charges including wire fraud, mail fraud and money laundering.

Prosecutors say the 69-year-old and another man ran a fraudulent investment scheme from September 2007 to December 2010 through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise. Prosecutors say the pair promised high rates of return but paid investors with other investor money.

Prosecutors have said Donnan used his extensive personal and professional network to lure investors.

Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

If convicted, Donnan could face a potentially lengthy prison sentence.

Keep clicking on WSAZ.com for the latest on this story.



UPDATE 5/14/14 @ 9:35 a.m.
ATHENS, Ga. (WSAZ) -- Closing arguments are underway in the fraud trial against former Marshall University Football Coach Jim Donnan.

The defense rested early Wednesday morning in an Athens, Georgia courtroom, according to an Athens newspaper.

Donnan was expected to testify in the case, but after the jury was sent home Tuesday, he told the judge he decided not to take the stand.

Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which investors lost almost $23 million from a business in Huntington, West Virginia.

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UPDATE 5/13/14 @ 4:15 p.m.
ATHENS, Ga. (WSAZ) -- Former Marshall Football Coach Jim Donnan will not testify in his defense in his fraud trial in Athens, Georgia, according to an Athens newspaper.

Donnan told the judge Tuesday that he decided not to testify.

According to the paper, Donnan's statement came after the judge dismissed jurors for the day, telling them they would return Wednesday to hear one more witness for the defense and closing arguments.

The prosecution rested its case late Tuesday morning.

The defense called three witnesses Tuesday, including an Athens businessman, Donnan's bankruptcy attorney, and Donnan's son, who was a former Marshall quarterback, Todd Donnan.

According to the paper, Todd Donnan testified that he had no concerns about the viability of GLC Limited, which was based out of Huntington, West Virginia, until 2010 when it ran into trouble.

Todd Donnan was an investor in the business.

According to the paper, Todd said, "I know that my dad loves me and my children more than anything in the world, and he would never put us in harm’s way.”

Jim Donnan is facing charges of conspiracy, wire fraud, mail fraud, money laundering and security fraud, all related to an alleged scheme in which GLC investors lost almost $23 million.

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UPDATE 5/12/14 @ 6 p.m.
ATHENS, Ga. (AP) - College coaches are testifying they lost money in what prosecutors say was a fraudulent investment scheme run by former Marshall University and University of Georgia football coach Jim Donnan.

North Carolina State University basketball coach Mark Gottfried and Texas State football coach Dennis Franchione testified Monday that they lost hundreds of thousands of dollars after investing in West Virginia-based GLC Limited.

The 69-year-old Donnan is on trial on charges including conspiracy, mail fraud and wire fraud. If convicted, he could face a potentially lengthy prison sentence.

Prosecutors say Donnan and Gregory Crabtree of Proctorville, Ohio told investors they were dealing in closeout or overstock merchandise and promised high rates of return, but they paid investors with other investor money.

Prosecutors have said Donnan used his extensive personal and professional network to lure investors.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security. As part of the plea deal, Crabtree agreed to testify against Donnan.

Keep clicking on WSAZ.com for the latest on this story.



UPDATE 5/12/14 @ 9:55 a.m.
ATHENS, Ga. (WSAZ) -- The fraud trial against former Marshall University Football Coach Jim Donnan is starting its second week in Athens, Georgia.

Donnan is charged with operating a Ponzi scheme, in which investors lost $22.9 million.

According to a newspaper in Athens, the prosecution is scheduled to continue calling witnesses Monday. Attorneys hope to have testimony for both sides wrapped up by Friday.

According to prosecutors, Donnan recruited investors and promised them large returns from West Virginia-based business GLC Limited. The business bought closeout merchandise and resold it for profit. Investigators say early investors were repaid with money from later investors.

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UPDATE 5/8/14 @ 1:35 p.m.
ATHENS, Ga. (WSAZ) -- The business partner of former Marshall University Football Coach Jim Donnan, now on trial in Georgia for an alleged Ponzi scheme, says Donnan knew what was going on.

According to a newspaper in Athens, Georgia, Gregory Crabtree took the stand Thursday to testify against his co-defendant.

Both men were indicted last year on dozens of charges, including fraud. Investigators say that Donnan operated a Ponzi scheme, in which investors lost $22.9 million.

Last month, Crabtree, of Proctorville, Ohio, pleaded guilty to conspiracy to commit fraud in the sale of a security. As part of the plea deal, Crabtree agreed to testify against Donnan.

During his testimony Thursday, according to the newspaper, Crabtree testified that Donnan had visited the GLC Limited warehouses in Huntington and Columbus on more than one occasion. Crabtree owned and operator the surplus merchandise business, and Donnan solicited investors for him.

Crabtree says that when the business began to crumble in 2010 and it became clear that Crabtree was repaying investors with investor money, Donnan gave him a hand-written document asking him to sign, saying that Donnan had no knowledge that investor money was being used this way.

"'He said it was 'to help me save face with my friends," Crabtree testified. "I said, 'Jim, you know you knew before this.'"

The defense is expected to cross examine Crabtree Thursday afternoon. Following his testimony, Crabtree's step-daughter, who was also the company's bookkeeper, is expected to take the stand.

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UPDATE 5/8/14 @ 11:07 a.m.
ATHENS, Ga. (WSAZ) -- The business partner of former Marshall University Football Coach Jim Donnan has taken the stand to testify against Donnan.

Donnan is charged with operating a Ponzi scheme, in which investors lost $22.9 million.

His trial started this week in Athens, Georgia.

Thursday morning, co-defendant Greg Crabtree took the stand, according to an Athens newspaper.

Crabtree was also indicted in connection with the fraud case. Last month, he pleaded guilty to conspiracy to commit fraud in the sale of a security and agreed to testify against Donnan.

He will be sentenced next month.

Prosecutors say the pair ran the scheme through GLC Limited, Inc., a West Virginia-based company that dealt in closeout merchandise.

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UPDATE 5/8/14 @ 10:25 a.m.
ATHENS, Ga. (WSAZ) -- The fraud trial against former Marshall University and University of Georgia Football coach Jim Donnan continues Thursday in Athens, Georgia.

Donnan is charged with operating a Ponzi scheme, in which investors lost $22.9 million.

Thursday, jurors are expected to hear from Gregory Crabtree, of Proctorville, Ohio. Crabtree was Donnan's business partner. He was indicted with Donnan last April. Last month, he pleaded guilty to conspiracy to commit fraud in the sale of a security and agreed to testify against Donnan.

According to an Athens newspaper, testimony began Wednesday.

Five witnesses for the prosecution took the stand including Huntington native and former ESPN executive Daniel Shoemaker.

According to the paper, Shoemaker introduced Crabtree and Donnan.

Shoemaker testified that Crabtree was over the enterprise and talked him into investing $50,000 to buy surplus Christmas toys from China. Shoemaker said the money was lost and he found out later "nothing was every purchased" by Crabtree.

Jim Burditt also took the stand Wednesday and is expected to wrap up his testimony Thursday, before Crabtree testifies.

According to the paper, Burditt became the chief restructuring officer of GLC, Donnan and Crabtree's company, in Huntington, West Virginia.

Burditt told the jury when he traveled to West Virginia to size up the operation, it was a disorganized mess. Burditt said GLC was run out of a small office in the back of a sporting goods store in downtown Huntington. He said there was also a 70,000-square foot warehouse filled floor-to-ceiling with merchandise, such as t-shirts, sweat shirts, sweat pants, and 3,000 bags of out-of-date potato chips, according to the newspaper.

Burditt testified the company had no budget, no financial plan, and no accounting system.

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UPDATE 5/7/14 @ 10:47 a.m.
ATHENS, Ga. (WSAZ) -- Day two of former Marshall Football Coach Jim Donnan's trial is underway in Georgia.

Donnan is charged with operating a Ponzi scheme, in which investors lost $22.9 million.

According to an Athens newspaper, an IRS agent took the stand Wednesday, discussing financial and corporate documents. The agent verified checks to and from investors in the bankrupt company GLC, out of Huntington, West Virginia.

In April 2013, a U.S. District Court grand jury in Macon, Georgia, returned the 85-count indictment against Donnan and Gregory L. Crabtree of Proctorville, Ohio. The charges include conspiracy, mail fraud and wire fraud, among others.

In March 2014, a superseding indictment reduced the charges to 47 counts against Donnan.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security. He is expected to testify against Donnan.

During opening statements Tuesday, the Athens newspaper reports that the prosecutor said Donnan controlled the money at GLC and was very hands on. But Donnan's attorney told a different story, saying Crabtree was in control and Donnan didn't know what he was doing.

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UPDATE 5/6/14 @ 3:05 p.m.
ATHENS, Ga. (WSAZ/AP) – A jury has been picked in the criminal trial of former Marshall University football coach Jim Donnan.

Donnan is accused of running a Ponzi scheme, in which investors lost $22.9 million.

Tuesday morning, a pool of 100 potential jurors reported to the U.S District Courthouse in Athens, Georgia, where the trial is taking place.

Just after 3 p.m., a jury was picked, according to the reporter covering the trial for the Athens Banner-Herald.

Opening statements are set for Tuesday afternoon.

In April 2013, a U.S. District Court grand jury in Macon, Georgia, returned the 85-count indictment against Donnan and Gregory L. Crabtree of Proctorville, Ohio. The charges include conspiracy, mail fraud and wire fraud, among others.

In March 2014, a superseding indictment reduced the charges to 47 counts against Donnan.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security.

Prosecutors say the pair ran the scheme through GLC Limited, Inc., a West Virginia-based company that dealt in closeout merchandise.

Authorities said Donnan convinced high-profile college coaches and former players to invest $80 million in the company. The money from new investors was continually needed to pay the company's expenses and other investors.

The individual losses ranged from a few thousand dollars to about $4 million, an SEC official said in 2012.

Donnan has pleaded not guilty to all the charges and has denied intentionally misleading investors.



UPDATE 5/6/14 @ 9:25 a.m.
ATHENS, Ga. (WSAZ) – Jury selection is underway in the criminal trial of former Marshall University football coach, Jim Donnan.

Donnan is accused of running a Ponzi scheme in which investors lost $22.9 million.

A pool of 100 potential jurors is scheduled to report to the U.S District Courthouse in Athens, Georgia where the trial is taking place, according to an Athens newspaper.

In April 2013, a U.S. District Court grand jury in Macon, Ga. returned the 85-count indictment against Donnan and Gregory L. Crabtree of Proctorville, Ohio. The charges include conspiracy, mail fraud and wire fraud, among others.

In March 2014, a superseding indictment reduced the charges to 47 counts against Donnan, according to court documents.

Last month, Crabtree pleaded guilty to conspiracy to commit fraud in the sale of a security.

Prosecutors say the pair ran the scheme through GLC Limited, Inc., a West Virginia-based company that dealt in closeout merchandise.

Authorities said Donnan convinced high-profile college coaches and former players to invest $80 million in the company. The money from new investors was continually needed to pay the company's expenses and other investors.

The individual losses ranged from a few thousand dollars to about $4 million, an SEC official said in 2012.

Donnan has denied intentionally misleading investors.

Donnan's attorney has previously acknowledged the former coach was paid lucrative commissions, but he said Donnan believed he was being paid from legitimate profits.

Among the coaches Donnan helped attract were Virginia Tech football coach Frank Beamer, ex-Dallas Cowboys coach Barry Switzer and University of Cincinnati football coach Tommy Tuberville.

Donnan was head football coach at Marshall University from 1990 through 1995 and at the University of Georgia from 1996 through 2000. He later became an ESPN analyst.

The trial could last three weeks.

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ORIGINAL STORY 5/5/14
ATLANTA, Ga. (WSAZ/AP) - Pretrial proceedings are expected to begin Monday for former Marshall University and University of Georgia football coach Jim Donnan, who is accused of running a Ponzi scheme in which investors lost $22.9 million.

In April 2013, a U.S. District Court grand jury in Macon, Ga. returned the 85-count indictment against Donnan and Gregory L. Crabtree of Proctorville, Ohio. The charges include conspiracy, mail fraud and wire fraud, among others.

Donnan’s criminal trial on the charges is set to begin Tuesday in Georgia.

Prosecutors say the pair ran the scheme through GLC Limited, Inc., a West Virginia-based company that dealt in closeout merchandise.

Authorities said Donnan convinced high-profile college coaches and former players to invest $80 million in the company. The money from new investors was continually needed to pay the company's expenses and other investors.

Crabtree pleaded guilty last month to conspiracy to commit fraud in the sale of a security.

Donnan has denied intentionally misleading investors.

The individual losses ranged from a few thousand dollars to about $4 million, an SEC official said in 2012.

Donnan's attorney has previously acknowledged the former coach was paid lucrative commissions, but he said Donnan believed he was being paid from legitimate profits.

Among the coaches Donnan helped attract were Texas State football coach Dennis Franchione, Virginia Tech football coach Frank Beamer, ex-Dallas Cowboys coach Barry Switzer and University of Cincinnati football coach Tommy Tuberville.

Donnan was head football coach at Marshall University from 1990 through 1995 and at the University of Georgia from 1996 through 2000 and later became an ESPN analyst.

Keep clicking on WSAZ.com for the latest information.


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