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Cedar Rapids, Iowa 52401
CEDAR RAPIDS — The fired leader of a now-defunct Cedar Rapids tourism agency became the organization’s second convicted executive this week when he admitted Thursday to bank fraud — lying that the 2018 “newbo evolve” music and cultural festival was on track to turn a profit when it actually lost millions.
Former GO Cedar Rapids president and chief executive officer Aaron M. McCreight, 47 — now tourism director for Dothan, Ala. — pleaded guilty in U.S. District Court to one count of felony bank fraud. He waived his right to have a grand jury indictment.
McCreight admitted to participating along with one of the employees he oversaw, Douglas S. Hargrave, 55, former finance director of GO Cedar Rapids, to defrauding Bankers Trust. McCreight admitted that 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.
McCreight admitted that he made false misrepresentations to the bank regarding a budget in support of increasing its loan. The faked budget overstated evolve’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; over $1.7 million in concert sales income; $475,000 in production expense; and $65,654 in profit, a complaint stated.
U.S. District Magistrate Judge Mark Roberts asked if the false statements to the bank included that the agency had sold 9,000 tickets for one of the headliners, Maroon 5, and 6,000 tickets for Clarkson. McCreight admitted that was true — a large overstatement.
McCreight 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.
Roberts asked if McCreight did so with the intent to defraud. McCreight said he did. The plea agreement is filed under seal and not in public court documents.
Roberts said McCreight faces up to 30 years in federal prison, a $1 million fine and up to five years of supervised release following any prison term. Restitution in the case also will be ordered at sentencing, but the judge didn’t provide an amount.
McCreight was allowed pretrial release without posting bail, to which prosecutors didn’t object. He is required to surrender his passport to the probation office in Alabama.
Roberts also included some conditions for the pretrial release, including that McCreight not have contact with anyone involved in this investigation and must work full-time.
Visit Dothan — where McCreight works now — said in a statement earlier this month 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 said it was “very confident in the financial management practices that it currently has in place” under McCreight.
Hargrave, now of Puyallup, Wash., pleaded guilty Wednesday to one felony count of bank fraud. He also faces up to 30 years.
The event lost $2.3 million, according to city of Cedar Rapids officials. 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.
The tourism agency board fired McCreight and Community Events Director Scott Tallman, saying it had been misled. GO Cedar Rapids, which the city helped finance by directing public hotel-motel tax to it, went out of business.
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