Ponzi Scheme Indicted

Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that GREGORY L. CRABTREE of Proctorville, Ohio, and JAMES M. DONNAN, III, of Athens, Georgia, have been charged in an eighty-five count indictment returned against them last week and unsealed today.  The indictment charges the two men with operating an alleged pyramid or “Ponzi” scheme between 2008 and 2010 in the Middle District of Georgia and elsewhere.

CRABTREE and DONNAN are scheduled to appear at 3:30 p.m. today before United States Magistrate Judge Charles Weigle for an initial appearance as to these charges.

Count one of the indictment charges conspiracy to commit wire and mail fraud in violation of United States Code Title 18, Sections 1349, 1341 and 1343.  It carries a maximum sentence of twenty years imprisonment and a $250,000 fine upon conviction, to be followed by three years of supervised release.

Counts two through thirteen charge mail fraud in violation of Title 18, United States Code, Sections 1341 and 2 .  Counts fourteen through thirty-six charge wire fraud in violation of Title 18, United States Code, Sections 1343 and 2.  Each count of mail or wire fraud carries a maximum sentence of twenty years imprisonment and a fine of $250,000, together with three years of supervised release per count.

Counts thirty-seven through fifty-one each charge the unlawful transportation of interstate securities and carry a maximum sentence of five years imprisonment, a maximum fine of $250,000, and a term of supervised release of three years per count.

Count fifty-two charges conspiracy to launder the proceeds of unlawful activity in violation of Title 18, United States Code, Section 1956 (h) and carries a maximum sentence of up to twenty years imprisonment and a maximum fine of up to $500,000 or twice the value of the funds or financial instruments involved in the offense, whichever is greater, to be followed with up to three years of supervised release.

Counts fifty-three through seventy charge conducting financial transactions with unlawful proceeds of mail and wire fraud (money laundering) to promote the commission of that fraudulent activity in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(I) and 2.  These counts each carry a maximum term of imprisonment of twenty years, a maximum fine of $500,000 or twice the value of the funds or financial instruments involved in the offense, whichever is greater, together with up to three years of supervised release.

Counts seventy-one through eighty-five charge engaging in monetary transactions with property criminally derived from wire and mail fraud in violation of Title 18, United States Code, Sections 1957 and 2.  Each of these counts carries a maximum term of imprisonment of ten years, a maximum fine of $250,000 or twice the value of the criminally derived property that is the basis of the transaction, whichever is greater, together with up to three years of supervised release.

The indictment also has notice provisions that the United States intends to forfeit various properties and assets of the defendants pursuant to the provisions of Title 18, United States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c).

The charges contained in the indictment are merely allegations of criminal activity by the government and the defendants are presumed innocent until and unless proven guilty.

The case was jointly investigated by Agents of the Federal Bureau of Investigation and the United States Internal Revenue Service, Criminal Investigation Division. 

Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2601.