Former University of Georgia football coach Jim Donnan is not guilty of fraud and related charges, an Athens jury decided Friday after two days of deliberations.
Former Georgia football coach Jim Donnan points to a passerby before addressing the media outside the Federal Court House on Friday in Athens.
Family members and Donnan himself teared up as U.S. District Court Judge Ashley Royal announced the verdict to conclude the two-week trial.
‚ÄúCertainly I was relieved,‚Äù a more composed Donnan said later as reporters gathered outside his lawyers‚Äô offices on Washington Street in Athens. ‚ÄúI feel like when I did find out what was going on, I tried to rectify a terrible situation for everyone. All of us that made money have tried our best to pay the money back.‚Äù
Jurors weren‚Äôt convinced by the government‚Äôs evidence and heard testimony that said Donnan had been a man of good character all his life, according to jury foreman Artis Ricks of Hartwell.
‚ÄúThe government didn‚Äôt have enough evidence to support the charges,‚Äù said Ricks, who stopped to talk to reporters afterward.
‚ÄúI never did see that smoking gun that proved guilt,‚Äù added Ricks, 55, who works in the meat department of a Hartwell grocery store. ‚ÄúI just kept thinking day after day the government was going to produce a smoking gun, but I never saw one.‚Äù
And it was Donnan himself who recruited smart businessmen to investigate what was going on at GLC when he found out something wasn‚Äôt right, Ricks said.
‚ÄúThat didn‚Äôt sound to me like something a guilty person would do,‚Äù he said.
Donnan was charged with 41 counts of mail fraud, wire fraud and related charges in connection with a West Virginia company called Global Liquidation Center, or GLC Ltd.
After meeting Greg Crabtree, the West Virginia man who founded GLC, Donnan began to invest in the company in 2007 and later recruited others into it, promising big returns on deals Crabtree made buying and selling overstock and unwanted goods.
Donnan recruited family and friends to invest in the company. At first they got the big returns he told them they would.
In reality, the company wasn‚Äôt selling nearly enough to justify those big returns, federal investigators found.
The money later investors paid in was going to pay earlier ones, which made it a Ponzi scheme, prosecutors said.
Crabtree pleaded guilty last month, getting a promise for a light sentence in exchange for testifying in Donnan‚Äôs trial.
Federal prosecutors told the jury Crabtree, a small businessman all his life, could never have pulled off the Ponzi scheme. They said Donnan, who had come to know many wealthy people during his football career, was behind it.
By the time GLC collapsed in late 2010, 94 investors had put $81 million into it.
Most investors had been recruited by Donnan.
When the company filed for bankruptcy in 2011, GLC owed investors about $23 million.
But Donnan lawyers Ed Tolley, Jerome Froelich and Devin Smith built a case that Donnan was as much a victim of Crabtree as other investors.
Donnan believed the deals he touted were legitimate, his lawyers said.
‚ÄúHe thought he was doing these people a favor,‚Äù Tolley told the jury on Wednesday in his closing argument. ‚ÄúHe thought he was benevolent. He thought this was going to be a great thing for everyone.‚Äù
Unlike most other investors, Donnan made big money off GLC, but now is bankrupt. Worth about $3 million when he met Crabtree, Donnan made about $8.4 million from investing in GLC, evidence in the trial showed.
About $4.3 million of that was returned to GLC investors either by a bankruptcy trustee or Donnan himself. He also paid a steep tax bill on his investment gains, he said.
To compensate for the financial losses, Donnan had to auction off cars, his wife‚Äôs jewelry and buy back his house at a bankruptcy auction, Tolley told jurors.
Donnan was brilliant as a football coach, but not as a businessman, his lawyers said.
‚ÄúIt is not a crime to be not very smart,‚Äù Tolley said to the jury. ‚ÄúIt is not a crime to be grossly negligent.‚Äù