ATHENS, Ga. — Prosecutors said Wednesday that Jim Donnan lured his friends into a fraudulent investment scheme because he was blinded by the enormous amount of money he could make, while defense attorneys argued the former University of Georgia football coach was duped and thought he was presenting them with a great opportunity.
Jurors were set to begin deliberating in the case after a lunch break after hearing from lawyers for both sides in Donnans trial on charges including conspiracy, wire fraud, mail fraud and money laundering.
Prosecutors say the 69-year-old and Gregory Crabtree of Proctorville, Ohio, ran the scheme from September 2007 to December 2010, through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise. Prosecutors have said Crabtree ran the day-to-day operations and that Donnan used his relationships in his extensive personal and professional network to lure investors.
Crabtree pleaded guilty last month to a single conspiracy charge and faces up to five years in prison. If convicted, Donnan could face a potentially lengthy prison sentence.
N.C. State basketball coach Mark Gottfried testified in the case that he lost more than $300,000 and that Donnan told him the investment carried pretty much no risk.
Donnan played quarterback for N.C. State and was ACC player of the year in 1967. He is a member of the College Football Hall of Fame and the North Carolina Sports Hall of Fame.
GLC was insolvent from the beginning and never had enough money to pay investors with profits from sales and, as a result, Donnan and Crabtree resorted to paying investors with money from other investors, prosecutor Pete Peterman said.
Its obvious from the get-go that this was a Ponzi scheme, he said, adding that the scheme collapsed when Donnan ran out of people to get money from.
Donnan was aware that GLC wasnt viable but made false payouts to investors to convince them to make additional payments, a form of money laundering, Peterman said. He also used ill-gotten gains from the scheme to make purchases including expensive cars, investments and private school tuition which amounts to another form of money laundering, Peterman said.
He took advantage of these peoples trust because he blinded himself he was blinded by the money he was able to make, Peterman said, adding that Donnans story is a textbook case of willful ignorance.
Donnans attorneys countered that Donnan may not have the best head for finance but that he sought advice from friends who were powerful business leaders and truly believed that GLC was a great investment opportunity that he wanted to share with those he cares about. His son testified that family members invested, too.
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, defense attorney Ed Tolley told jurors.