An Athens jury went home Thursday without reaching a verdict in the fraud trial of former University of Georgia football coach Jim Donnan.
The jury of five men and seven women will continue deliberations starting 9 a.m. today.
Donnan is charged with multiple counts of wire fraud, mail fraud, money laundering and related charges in connection with a failed West Virginia company called Global Liquidation Center, or GLC Ltd.
Investors recruited by Donnan, including family and friends, thought they were buying into a company capable of earning big profits from the resell of surplus and salvage merchandise. Instead, sales were relatively small and money from later investors was used to pay earlier investors ‑ a Ponzi scheme, say federal prosecutors.
For all the charges leveled against Donnan, the central question the jury faces is if he intended to deceive when he hooked investors with the promise of big returns.
The man who was Donnan’s partner in GLC, Greg Crabtree of Huntington, West Virginia, pleaded guilty last month, agreeing to testify against Donnan in exchange for a reduced prison sentence.
Prosecutors told jurors that Donnan was the mastermind of the scheme.
“The evidence shows beyond a reasonable doubt that he did the things he is charged with,” said Assistant U.S. Attorney Paul McCommon in his closing argument to the jury on Wednesday.
In four years, 94 investors poured some $81 million into GLC, a company that prosecution investigators determined only had about $5 million in sales.
“Ladies and gentlemen, this was not a legitimate business,” said U.S. Assistant Attorney General Pete Peterman in his portion of the government’s closing argument.
And Donnan knew that, he said.
“(Donnan and Crabtree) worked together to make this project work,” he said.
However, Donnan’s defense team say the former coach was as big a dupe as any of the investors he recruited.
And “negligence … and foolishness” do not amount to fraudulent intent, and if someone was acting in good faith even though what they proved false, that is a “complete defense” against the criminal charges, U.S. District Court Judge Ashley Royal said as he charged the jury.
Testimony and other evidence in the case showed that Donnan acted in good faith, his lawyers said when they got their chance to address the jury.
They called Donnan a victim of Crabtree’s scam.
“He thought he was doing these people a favor,” Donnan lawyer Ed Tolley told the jury. “He thought he was benevolent.”
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 off the company GLC, evidence in the trial showed. About $4.3 million of what Donnan earned was returned to GLC investors, either by a bankruptcy trustee or Donnan himself.
He has had to auction off cars, his wife’s jewelry and buy back his house at a bankruptcy auction, Tolley told jurors.
Though a success on the sidelines, Tolley said Donnan was 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.”