116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — More than three years after the infamous “newbo evolve” festival brought headliners including Maroon 5 and reality TV stars to Cedar Rapids — but then stiffed some of the vendors and left an unpaid $1.5 million bank loan — federal authorities announced Tuesday they have filed criminal charges.
According to documents filed in U.S. District Court, former GO Cedar Rapids president and chief executive officer Aaron McCreight, 46, now of Dothan, Ala., and former GO Cedar Rapids finance director Doug Hargrave, 54, now of Puyallup, Wash., each face one count of bank fraud.
GO Cedar Rapids, which the city helped finance by directing public hotel-motel tax to it, went out of business after the three-day music and cultural event staged by the organization in August 2018. Despite promises for a full investigation, GO Cedar Rapids collapsed without paying vendors and providing few answers about what happened to the money. Rather than question the board, which included city representation, city officials redirected the hotel-motel tax money to start a new tourism office.
Court documents accuse McCreight and Hargrave of a scheme to defraud a bank — Bankers Trust of Iowa — by making misrepresentations about the festival’s ticket sales, projected revenue, projected expenses and the amount of loss that McCreight and Hargrave expected the event to generate.
Based on the misrepresentations, the documents allege, McCreight and Hargrave fraudulently induced the bank to loan the organization hundreds of thousands of dollars.
McCreight, now the president and CEO of Visit Dothan, which promotes tourism in the Alabama community, didn’t return a phone call for comment. But the Visit Dothan board said in a statement to The Gazette that it was standing behind him.
“The Board of Directors of Visit Dothan recently met and voted unanimously to retain Aaron McCreight as its President and CEO,” the board said in the statement. “The Board reached this decision after careful consideration of the present facts and circumstances surrounding the 2018 music festival event held during his tenure at Go Cedar Rapids in Cedar Rapids, Iowa, where Aaron has now admitted guilt, expressed remorse, and a federal judge will rule on a punishment for him in the near future.”
The board, in the statement, said it was focused on McCreight’s time in Dothan and his job performance there.
“Visit Dothan’s mission is to create positive experiences for Dothan visitors, secure sports tournaments that support our hospitality and tourism industry and generate economic dollars for our community. Since his arrival in Dothan, Aaron has hit a grand slam in all three areas,” the board said in the statement.
The board also said it was “very confident in the financial management practices that it currently has in place and in the confidence that it has placed in Aaron based on the job that he has done.”
In Cedar Rapids, the newbo evolve event lost $2.3 million, according to city officials. A three-day pass, which cost $375, were sold to only 602 people out of 4,000 that GO Cedar Rapids had planned for. The organizers expected to sell 22,000 general admission concert tickets, but only 8,340 were actually sold, and another 3,804 complimentary tickets were handed out.
The festival included headliners Kelly Clarkson and Maroon 5, while fashion designers Carson Kressley and Christian Siriano, filmmaker John Waters, U.S. Olympian Adam Rippon and others would inspire and entertain in NewBo and downtown.
But GO Cedar Rapids couldn’t repay a $1.5 million loan from Bankers Trust or $800,000 promised to vendors. Bankers Trust fired its local president in the aftermath of the fesitival.
McCreight and Scott Tallman, GO Cedar Rapids community events director, said later they had been misled about ticket sales, sponsorships and spending.
If convicted, McCreight and Hargrave each face up to 30 years in federal prison, a fine and supervised release following any prison terms. A judge hasn’t set first appearance dates for them yet.
The case is being prosecuted by Acting U.S. Attorney Sean Berry and Assistant U.S. Attorney Kyndra Lundquist, and was investigated by the FBI.
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