Charges Arose from False Statements Made in Order to Secure Newbo Evolve Financing
Two men who made false representations to a bank to obtain more money for Newbo Evolve, a three-day music and cultural event held in Cedar Rapids, Iowa, in August 2018, were each sentenced on February 16, 2023, to more than one year in federal prison.
Doug Hargrave, age 56, from Puyallup, Washington, and Aaron McCreight, age 48, from Dothan, Alabama, received the prison terms after they each pled guilty on January 26, 2022, to one count of bank fraud.
Information from the plea and sentencing hearings showed that the two men previously held executive positions in Go Cedar Rapids (“GoCR”), the nonprofit organization that planned and executed Newbo Evolve. McCreight was President and Chief Executive Officer, and, in the summer of 2018, Hargrave was GoCR’s Finance Director. Newbo Evolve featured, in addition to other attractions, concerts by singer Kelly Clarkson and the band Maroon 5. As the Newbo Evolve event dates approached, GoCR did not have enough money to, among other things, pay Kelly Clarkson and buy the alcohol that was to be sold at the concert venue.
Hargrave and McCreight then defrauded the financial institution that extended a loan to GoCR to finance Newbo Evolve by making misrepresentations about Newbo Evolve’s actual ticket sales, projected revenue, projected expenses, and the true amount of loss they were projecting and expecting Newbo Evolve to generate. Those misrepresentations fraudulently induced the bank to loan GoCR additional money for Newbo Evolve. In July 2018, McCreight and Hargrave sent a false and fraudulent Newbo Evolve 2018 Budget to the bank in support of GoCR’s request for an increase in its loan. In a meeting with representatives of the bank, McCreight fraudulently misrepresented the number of tickets that had been sold for Maroon 5 and Kelly Clarkson’s performances. The bank subsequently increased the loan to GoCR from $1.5 million to $2.2 million.
Newbo Evolve occurred on August 3-5, 2018. The event lost more than $2 million. After receiving income that Newbo Evolve produced, the lending bank lost $1,442,231.25 on GoCR’s defaulted $2.2 million promissory note. Heavily in debt with no cash or assets, GoCR ceased operations in October 2018. Approximately 97 vendors that provided services for Newbo Evolve did not receive full payment, losing approximately $800,000 in the aggregate. United States District Court Judge C.J. Williams noted in sentencing Hargrave and McCreight, they committed the offense to save face and, while they did not line their own pockets, they gambled with the bank’s money.
McCreight and Hargrave were sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. McCreight was sentenced to 18 months’ imprisonment. Hargrave was sentenced to 15 months’ imprisonment. Both men were ordered to make $1,442,231.25 in restitution to the lending bank joint and several with each other. Both men must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
McCreight and Hargrave were released on bonds previously set and are to surrender to the Bureau of Prisons on dates yet to be set.
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by former United States Attorney Sean R. Berry, Assistant United States Attorney Matthew J. Cole, and Assistant United States Attorney Kyndra Lundquist.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 22-CR-0001 and 22-CR-0002.
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