Former GO Cedar Rapids exectuives sentenced to more than 14 months in federal prison

© Provided by Cedar Rapids KCRG-TV Aaron McCreight

CEDAR RAPIDS, Iowa (KCRG) - Aaron McCreight, the former CEO of GO Cedar Rapids, begged for mercy and cried in the courtroom on Thursday before a federal judge sentenced him to serve 18 months in federal prison for bank fraud. His former Chief Financial Officer, Doug Hargrave, was later sentenced to 15 months in federal prison.

Judge C.J. Williams said the two executives for the city of Cedar Rapids Vistors and Tourism Bureau called GO Cedar Rapids along with others were “in over their heads” while trying to create a three-day festival featuring concerts from Maroon 5 and Kelly Clarkson. He said GO Cedar Rapids “gambled with the bank’s money” after executives gave lenders incorrect information to sustain a failed festival.

McCreight and Hargrave pled guilty and were convicted of bank fraud last year. Prosecutors said they gave Banker’s Trust false budgets showing NewBo Evolve was turning a profit while the actual budget showed the event creating a loss, at one point, worth more than $1 Million. The festival ended up losing more than $2 Million and forced GO Cedar Rapids to cease operations in October 2018.

Prosecutors said around 97 vendors didn’t receive full payment for services provided, worth around $800,000. Matt Cole, who is the first assistant United States Attorney for the Northern District of Iowa, said the criminal conduct affected many individuals and organizations like the city of Cedar Rapids and GO Cedar Rapids’ board of directors. However, they focused on the crime of bank fraud because it was the catalyst for the festival’s negative effects.

The crime, the underlying crime, was the lies to the bank and they had to present false numbers, false information to the bank in order to get the loans to continue on with their event” Cole said. “Because of that fraud, it had ripple effects that went down the line to these other individuals or organizations”

He also said this case was unique because the individuals were committing a crime to save their reputations rather than enrich themselves directly.

Those differences along with a number of other different details in the case led to the judge giving a sentence to both executives lower than federal guidelines. Both will also have to pay restitution to the bank collectively worth around $1.4 Million.

McCreight, who blamed Hargrave for the crime multiple times while speaking at the hearing, resigned from his job as President and CEO at Visit Dothan after he was sentenced to prison on Thursday. The board for Visit Dothan said his resignation is effective immediately in an email.

The job, which he took after being fired from GO Cedar Rapids, is similar to the position he held in Cedar Rapids. Prosecutors said he lied in his interview about his role in NewBo Evolve to gain the position.

Hargrave held his head down for most of his sentencing hearing on Thursday afternoon. His attornies argued the amount of restitution due to the bank was significantly lower, but Judge C.J. Williams called this argument “absurd” before setting the restitution to the bank for Hargrave and McCreight around $1.4 Million.