Coaches say they lost money invested with Donnan
ATHENS, Ga. (AP) College coaches testified Monday that they thought they had a guaranteed investment but ended up losing money in what prosecutors said was a fraudulent scheme run by former University of Georgia football coach Jim Donnan.
North Carolina State University basketball coach Mark Gottfried, Texas State football coach Dennis Franchione, University of Cincinnati football coach Tommy Tuberville and former college basketball coach Billy Gillispie testified in Donnan’s trial on federal charges including conspiracy, mail fraud and wire fraud. They said they lost large sums of money after investing in West Virginia-based GLC Limited, according to media reports.
Gottfried, who said he lost more than $300,000, said Donnan told him the investments carried ”pretty much no risk.” Donnan compared the business to an ”already pumping” oil well, Gottfried said.
Like other investors, Franchione said his 35-year relationship with Donnan was key to his decision to invest.
”I think the most important thing was I had known Jim for a long time and trusted him,” he said. ”If he was invested in it and doing well, it gave me confidence.”
Donnan faces a potentially lengthy prison term if convicted. His partner, Gregory Crabtree, pleaded guilty to a single conspiracy charge last month and faces up to five years in prison.
Donnan’s lawyers have said he was also a victim of the scheme. Donnan thought he’d found a good investment and wanted to share his good fortune with others, his attorneys have said.
Tuberville testified that he and his wife invested nearly $2 million, but that Donnan didn’t pressure him.
”It wasn’t a forcible sell, like `You’ve gotta put money in this,”’ said Tuberville, who said he’s known Donnan for about 20 to 25 years. Donnan told him, ”`Don’t take my word for it, call Dennis Franchione, and feel him out because he’s been in it for a while.’ And that’s what I did,” Tuberville testified.
The amount Tuberville lost wasn’t made clear in court.
Gillispie, the former coach at the University of Kentucky, Texas Tech and Texas A&M, said a friend referred him to Donnan. Gillispie said Donnan assured him he wouldn’t lose his principal.
”The most important thing to me was you’re not going to lose any money,” Gillispie said.
Like other investors, Gillispie initially received a high payout, but ended up losing a much greater sum when the company crumbled.
A federal indictment against Donnan and Crabtree, of Proctorville, Ohio, says the pair ran the scheme from September 2007 to December 2010 through GLC, a company that dealt in wholesale and closeout merchandise. Prosecutors say the company raised more than $80 million from 94 investors, and nearly $23 million was lost.