Two leaders of ex-GO Cedar Rapids will be sentenced for fraud in November

CEDAR RAPIDS — The two leaders of a defunct Cedar Rapids tourism agency that lost millions in 2018 for a music and cultural festival will be sentenced on federal bank fraud convictions in November.

Doug S. Hargrave, 55, former finance director of GO Cedar Rapids, will be sentenced Nov. 4, and Aaron M. McCreight, 47, former GO president and chief executive officer, will be sentenced Nov. 10 in U.S. District Court.

Both pleaded guilty in January and each faces up to 30 years in federal prison for bank fraud.

McCreight, now a tourism president and chief executive officer in Dothan, Ala., admitted to participating along with one of the employees he supervised, Hargrave, to defrauding Bankers Trust in the “newbo evolve” festival in 2018.

McCreight, during the plea, admitted the tourism agency didn’t have enough money to pay for alcohol to be sold at the three-day event or to pay one of the headline acts, singer Kelly Clarkson.

He also admitted to making fraudulent misrepresentations to the bank regarding a budget in support of increasing its loan. The faked budget overstated the festival’s expected revenues, expenses and expected profit to be $65,654, according to court documents.

An email, which McCreight directed Hargrave to send to Bankers Trust, included false projected income of $475,000 in sponsorship income; more than $1.7 million in concert sales income; $475,000 in production expense; and $65,654 in profit, a complaint stated.

The statements made to the bank, stating the agency sold 9,000 tickets for one of the headliners, Maroon 5, and 6,000 for Clarkson, was not accurate — a large overstatement, McCreight admitted during the hearing.

McCreight also admitted he signed a promissory note on July 19, 2018, for an increased amount from Bankers Trust of $1.5 million to $1.75 million, and the agency later got an additional $250,000.

During Hargrave’s plea, he admitted that, at the direction of McCreight, on July 16, 2018, he sent a fraudulent budget to the bank in support of an increased loan. The budget falsely overstated evolve’s expected revenues, expenses and expected profit to be $65,654, according to court documents.

He also said the email to the bank included the false projected income items, as McCreight’s plea detailed.

Hargrave, who now lives in Puyallup, Wash., admitted the bank approved the increased loan to the agency, from $1.5 million to $1.75 million on July 19, 2018. He also admitted that McCreight signed a promissory note for the loan and the agency later received the additional $250,000.

Both men also face up to a $1 million fine and up to five years of supervised release following any prison term. Restitution also will be ordered for each defendant, which will be determined at sentencing.

The event lost $2.3 million, a former GO Cedar Rapids board chair reported after the event. The event included Clarkson and Maroon 5, while fashion designers Carson Kressley and Christian Siriano, filmmaker John Waters, U.S. Olympian Adam Rippon and others entertained in NewBo and downtown.

GO Cedar Rapids couldn’t repay the Bankers Trust loan or $800,000 promised to vendors. Bankers Trust fired its local president in the aftermath of the failed event.

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