Jonas Jennings was Jim Donnan’s first recruit in 1996 and said the former Georgia football coach “became like a father figure” as he played for the Bulldogs over the next five years. But Jennings said he felt betrayed after losing most of $800,000 in investments that Donnan encouraged him to make and took the stand as a prosecution witness on Thursday.
Former UGA linebacker Kendrell Bell followed Jennings to the stand as the fraud trial against Donnan concluded its third day in U.S. District Court. Bell said he lost $2 million he invested through his former coach. Both men have recovered portions losses through Donnan’s bankruptcy proceedings.
Jennings said Donnan invited him to his Athens home in February of 2010 to tell him about “sweet deal” in which Donnan said he could guarantee “huge returns” in a short amount of time.
Jennings, who had just retired from the NFL after playing eight seasons with the Buffalo Bills and San Francisco 49ers, said he invested $500,000 initially and another $300,000 a few months later.
“All I heard was a guarantee from a guy I knew very well,” Jennings testified. “He said my principal was guaranteed and I would get whatever percentage on that (first) deal. He said, ‘you’ve got nothing to worry about.’”
Donnan and the GLC Limiteed, surplus merchandise company he was representing, came through for Jennings in the beginning, just as they had done with Bell before him. Jennings said he received his first two monthly repayments of $87,500 each. But they missed his next scheduled payment and then came through with only $60,000 later. By then Jennings had already invested in the second deal with Donnan. He would receive no other money and the court listed his loss in the venture as $537,500.
“That’s when I saw a side of Coach Donnan I”d never seen before,” Jennings told the court. “I told him I don’t need to gain money but I can’t lose money because I depend on that money.”
Eventually Jennings couldn’t get Donnan on the phone anymore. In the most sensational moment of Thursday’s proceedings, Jennings read the entire text exchange he had with Donnan from the day they first discussed a potential investment until they were no longer communicating. Donnan filed for bankruptcy in July 2011.
“I can’t believe you put me in this situation. Sad.” That was one of the last texts Jennings read in court.
Jennings and Bell were among five witnesses called by the prosecution on Thursday, not including Jim Burditt, the chief restructuring officer who took over GLC Limited after it was deemed insolvent in December of 2010.
Also taking the stand were Gregory Crabtree, Donnan’s alleged co-conspirator who has taken a plea agreement; Jennifer Kilcrease, a UGA employee who did bookkeeping work for Donnan on the side; and Mike Cheek, a former Coca-Cola vice president and adjunct professor at UGA who invested more than $2 million into GLC through Donnan.
Crabtree was expected to be the day’s star witness for the prosecution. He told the jury Donnan knew full well that Crabtree had used investor money to repay late investors in what prosecutors describe as a Ponzi scheme. Answering questions from U.S. assistant prosecutor Pete Petermann, testified that Donnan had visited the warehouses of GLC Limited in Huntington, W.Va., and Columbus, Ohio, on more than one occasion and had brought fellow investors with him. Crabtree was owner and operator of the business and Donnan solicited investors for him.
When the business began to crumble in 2010 and it became clear that Crabtree was repaying investors with investor money, Donnan presented Crabtree with a hand-written document he asked Crabtree to sign that said Donnan had no knowledge that investor money was being used to pay other investors. The document was presented as evidence and shown to jurors on a large video screen.
“‘He said it was ‘to help me save face with my friends,” Crabtree testified. “I said, ‘Jim, you know you knew before this.’”
Earlier in Thursday's proceedings, Donnan attorney Ed Tolley had tried to establish that Crabtree is a person that can't be trusted. He asked Burritt, the chief restructuring officer called in by investors to assess the operation, if he'd ever said anything to Donnan about Crabtree's trustworthiness.
“I remember having a conversation with Mr. Donnan, he was asking me about whether GLC was a real business,” Burritt said under cross examination. “He was telling me something Greg told him and I cut him off and said I thought Crabtree was a pathological liar.”
Day three of the trial will continue after lunch with the defense’s cross examination of Crabtree. Crabtree’s step-daughter and bookkeeper of GLC Lisa Holbrook is expected to be the next witness called by the prosection.
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