ATLANTA — Former University of Georgia football coach Jim Donnan and a business partner face charges that they operated a Ponzi scheme, according to federal indictment unsealed Tuesday.
The grand jury last week 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.
Lawyers for Donnan and Crabtree did not immediately respond to calls and emails seeking comment. Both men were set to appear in federal court in Macon Tuesday afternoon.
The indictment says the pair ran the scheme through GLC Limited, Inc., a West Virginia-based company that dealt in closeout merchandise. Crabtree was president of the company and was responsible for its day-to-day operation, while Donnan’s main role was to recruit investors, the indictment says. The pair offered and sold short-term investments, and promised investors rates of return ranging from 50 percent to 200 percent.
Investors generally weren’t given much information about the deals but threw their money in because they trusted Donnan. He and Crabtree routinely lied to investors about the nature of the business, the indictment says.
GLC had little income other than the investments, so money from new investors was continually needed to pay expenses, to pay Crabtree and Donnan and “to perpetuate the scheme by paying what was falsely represented to investors as being a return on their investment from sales,” the indictment says. Between September 2007 and October 2010, the pair raised more than $81 million from 94 investors.
The indictment identifies investors only by their initials. But the U.S. Securities and Exchange Commission last year filed a complaint against Donnan and others, saying the ex-coach used his influence to get high-profile college coaches and former players to invest $80 million into a Ponzi scheme. That case is still pending in federal court in Atlanta.
The individual losses ranged from a few thousand dollars to about $4 million, an SEC official said last year.
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.
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.
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 Texas Tech football coach Tommy Tuberville.
OREGON: Acknowledged major NCAA violations in connection with football recruiting and proposed a self-imposed two-year probation with the loss of one scholarship in each of the next three years, according to documents released by the school.
The case is expected to go before the infractions committee at some point this year.
ALABAMA: Defensive coordinator Kirby Smart is receiving a hefty raise. Boss Nick Saban’s salary is staying put.
University trustees on Tuesday approved a three-year deal that would be worth $3.85 million for Smart. Saban’s terms and salary remained the same except for performance bonuses changed to reflect a four-team playoff that will start in two seasons.
Saban will make $200,000 if Alabama makes it to the semifinals, $300,000 for a berth in the championship game and $400,000 for a title. He received a deal in March 2012 worth nearly $45 million over eight years.
Smart received a raise last year to $950,000. He will make $1.15 million next season and $1.35 million each of the following two years.