Dr. David Allen, who referred to himself as a close personal friend of Jim Donnan, testified that the former Georgia football coach implored him to invest the Allen family nest egg — $1 million – into GLC Limited in July of 2010. The company was pronounced insolvent five months later.
“This was money I’d put aside for probably 10 years, and he was aware of that,” Allen, an Athens urologist, told assistant U.S. attorney Paul McCommon. “I’ve had some health problems and had just turned 60 and I wanted to use that money to be debt free when I retired. I initially told him it wouldn’t be available to anyone. I told him it wasn’t investment money; it was family money. But I heard back from him and he seemed distraught. He told me he was in a situation that could affect his family and affect Mary, his wife. I subsequently invested it with him.”
Including previous investments Allen made through Donnan, who was representing the company to investors, Allen lost a total of $1,387,500. He was among dozens of net-losers in what prosecutors have described as a Ponzi scheme.
Testimony continues in the fraud trial against Donnan in U.S. District Court. Allen was one of nine former investors the government called as witnesses Friday, including Michael Cheek, a former vice president at Coca-Cola and UGA adjunct business professor; Dick Bestwick, a former college football head coach and UGA athletic administrator; and Jack Bauerle, the Bulldogs’ longtime swim coach.
The investors came from a broad spectrum of socioeconomic backgrounds. There was Bo Thurston, Donnan’s landscaper, and Zachary Stribling, his hair stylist. And there was also Ed Price, a real estate developer from Braselton who described losing $1.1 million in the GLC deals as “disappointing,” but added that it “didn’t change my lifestyle.”
Bestwick, 83, who needed help entering and exiting the court room due to a health issue, testified that he and his wife lost $40,000 of a $100,000 investment they made with GLC at the behest of Donnan. But he wasn’t upset with the man he recommended for the Georgia job in 1996.
“I just wish Jim hadn’t got mixed up in this mess,” said Bestwick, who served as an associate athletic director at Georgia when Donnan was coaching there.
Donnan scored similar testimonial victories on Friday as well. Defense attorneys argue that Donnan was just trying to cut in friends and family on what until 2010 had been a great investment opportunity, and a lot of the people that lost money with him seem to believe that.
Bauerle, who plays tennis with Donnan regularly, lost all $100,000 of the investment he made withDonnan in August of 2010. But he said they are “probably closer than ever” now as friend.
“I trust Jim, totally,” he said on the stand. “I thought he had my best interest in mind.”
Bauerle was able to retrieve about $15,000 through Donnan’s bankruptcy proceeding. He is also dealing with a controversy of his own at the moment. He is currently suspended as Georgia’s swimming and diving coach while the NCAA conducts an investigation into the program.
Asked about the case after testifying, Bauerle said he didn’t believe Donnan was deliberately deceiving investors. “I don’t think there’s anything he’d do to hurt his friends.
Friday was the fourth day of the government’s fraud trial against Donnan. He is charged with wire fraud, mail fraud and money laundering in a 41-count indictment. He and Gregory Crabtree — who has already pleaded guilty to one count of fraud in the case — are accused of running a Ponzi scheme through Crabtree’s company, GLC Limited of Huntington, W.Va. Donnan has pleaded not guilty.
Prosecutors allege that Donnan helped lure 94 investors to invest more than $81 million into GLC. Late investors lost $22.9 million after the operation collapsed in December of 2010. The trial will resume Monday with the prosecution continuing to call witnesses. It is expected to last at least another week.
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