ATHENS, Ga. -- An Ohio man charged with operating a Ponzi scheme with former University of Georgia football coach Jim Donnan has pleaded guilty to a federal fraud charge.
Donnan has pleaded not guilty to the federal charges. His trial is scheduled to begin May 6 in U.S. District Court for the Middle District of Georgia in Athens.
Gregory Crabtree’s sentencing is scheduled for June 24, also in Athens.
Federal prosecutors have charged that Crabtree and Donnan used a bankrupt West Virginia-based company called GLC Ltd. as a Ponzi scheme, enticing investors with high rates of return on the money they put into the company.
But instead of using investors’ money to buy inventory for resale, according to prosecutors, the money went to pay earlier investors, to operate the business, and to Crabtree and Donnan.
Donnan has denied wrongdoing in the case, saying he thought the company as profitable. Donnan convinced a number of people in the Athens area and in the sports world to invest in GLC, but the coach thought he was sharing his good fortune with them, not deliberately misleading them, he has said.
Federal prosecutors said Crabtree made profits of some $1.6 million from the scheme, while Donnan received more than $8.4 million.
Investors lost some $23 million, according to court documents.
Donnan was UGA’s head football coach from 1996 to 2000, posting a 40-19 record.