Cedar Rapids, Iowa – Two executives of a Cedar Rapids tourism company have confessed to defrauding a bank in order to get money to support a three-day music and cultural festival in 2018.
Aaron M. McCreight, 47, of Dothan, Alabama, was the president and CEO of GO Cedar Rapids, which promoted the “Newbo Evolve” event in 2018. He entered a guilty plea to bank fraud on Thursday.
The identical accusation was brought against Douglas S. Hargrave, 55, of Puyallup, Washington, who entered a guilty plea on Wednesday, according to a press statement from federal prosecutors.
The men confessed to defrauding Bankers Trust in Cedar Rapids by misrepresenting ticket sales, estimated revenues and costs, and the overall loss they were expecting for the event, which included performances by Kelly Clarkson and Maroon 5.
A few weeks before the event, the tourism agency ran out of money, which it used to, among other things, pay Clarkson and purchase wine for the concert venue, according to the prosecutors. The event had a $2.3 million loss.
GO Cedar Rapids was unable to return a $1.5 million loan from Bankers Trust or the $800,000 in payments promised to vendors, and the company was forced to close its doors.