Proctorville man gets 5 years in investment fraud schemePublished 11:55am Wednesday, August 27, 2014
ATHENS, Ga. (AP) — A judge on Tuesday sentenced a man accused of running an investment fraud scheme that lost millions in investor dollars to serve five years in federal prison.
U.S. District Judge C. Ashley Royal in Athens also ordered Gregory Crabtree, 53, of Proctorville, to pay restitution of more than $20 million and to serve three years of supervised release once he gets out of prison. Crabtree had pleaded guilty to a single count of securities fraud in April after reaching an agreement with prosecutors.
Crabtree declined to comment after the sentencing.
“He’s always taken every step he could to take responsibility for his conduct,” his lawyer, Charlie Cox, said of his client.
Prosecutors said Crabtree and former University of Georgia football coach Jim Donnan ran a fraudulent investment scheme from September 2007 to December 2010 through GLC Limited, a West Virginia-based company dealing in wholesale and closeout merchandise.
Prosecutors said more than 50 investors invested a combined total of more than $80 million into the scheme and lost a total of nearly $23 million.
Donnan stood trial in May and a jury acquitted him of all charges. His lawyers argued that he was as much a victim of a fraudulent investment scheme as the rest of the investors.
Donnan was head coach at Marshall University from 1990 to 1995 and at Georgia from 1996 to 2000. He later became an ESPN analyst. Prosecutors argued during Donnan’s trial that Crabtree ran day-to-day operations while Donnan lured investors from his extensive network of personal and professional contacts.
In late 2009, problems surfaced as Crabtree was having trouble moving merchandise and started stocking it in warehouses because investor money was coming in faster than he could sell it, he testified during Donnan’s trial. He spoke to Donnan about the troubles, and Donnan said he’d look into ways to help, Crabtree said. They ended up using investor money to pay other investors because they didn’t have profits from sales to pay the high returns Donnan had promised investors, Crabtree said.