A federal jury will resume deliberations at 9 a.m. Thursday in the fraud trial of former University of Georgia football coach Jim Donnan.
The jury of five men and seven women deliberated for about three hours Wednesday afternoon before sending U.S. District Court Judge Ashley Royal a request to go home early.
Royal on Wednesday charged the jury to decide whether Donnan is guilty or not on the 41 criminal charges federal prosecutors have lodged against him.
Donnan is charged with multiple counts of wire fraud, mail fraud, money laundering and related crimes in connection with failed West Virginia company Global Liquidation Center, or GLC Ltd.
Family and friend recruited by Donnan thought they were investing in a company that got big returns from buying surplus or salvage merchandise and selling it at big profits.
Instead, money from later investors was used to pay earlier investors — a Ponzi scheme, prosecutors maintain.
The man who was Donnan’s partner in GLC, Greg Crabtree of West Virginia, pleaded guilty last month, agreeing to testify against Donnan in exchange for a prison sentence of no more than five years. Indicted at the same time as Donnan, Crabtree faced spending the rest of his life behind bars if convicted.
But for all of the alleged crimes, the main question the jury must decide is whether Donnan intended to deceive when he told investors about returns of up to 60 percent they might earn.
During closing arguments on Wednesday, lawyers for the government said Donnan did know he was making false promises.
“The evidence shows beyond a reasonable doubt that he did the things he is charged with,” said Assistant U.S. Attorney Paul McCommon.
In four years, 94 investors poured some $81 million into GLC. But the company only had about $5 million in sales before collapsing in late 2010, Assistant U.S. Attorney Pete Peterman told jurors.
“Ladies and gentlemen, this was not a legitimate business,” he said. “Investors were paid with investor money.”
And Donnan knew that, he argued.
“(Donnan and Crabtree) worked together to make this project work,” he said.
Donnan was worth about $3 million when he partnered with Crabtree in GLC, testified his bankruptcy lawyer Ernie Harris. Evidence in the trial showed Donnan drew about $8.4 million out of GLC.
In the months before GLC collapsed, Donnan stopped putting money into the company, but his pitch to potential investors grew urgent, McCommon told the jury.
In charging the jury, Royal explained to the jury that “negligence … and foolishness” aren’t adequate to establish fraudulent intent and acting in good faith is a “complete defense.”
Donnan’s lawyers say the former coach really believed the company was legitimate when he encouraged others to invest in GLC.
“He thought he was doing these people a favor. He thought he was benevolent. He thought this was going to be a great thing for everyone,” Donnan lawyer Ed Tolley told the jury. “There wasn’t any reason for Jim Donnan to know this business wasn’t being operated properly.”
Donnan made big money off GLC, unlike most other investors. But he now is bankrupt.
About $4.3 million of what Donnan took out of the company has been returned to GLC investors. He has had to auction off cars, his wife’s jewelry and buy back his house at a bankruptcy auction, Tolley said.
Donnan is a smart football coach, Tolley said, but not a particularly astute businessman.
“It is not a crime to be not very smart,” Tolley said. “It is not a crime to be grossly negligent.”