Former tourism officials get prison time in Cedar Rapids music festival bank fraud

Leaders of Cedar Rapid's local tourism board will serve federal prison time after pleading guilty to defrauding a bank to support the doomed Newbo Evolve music festival.

Former Go Cedar Rapids CEO Aaron McCreight and CFO Doug Hargrave were indicted last year for misleading Des Moines-based Bankers Trust about ticket pre-sales for the 2018 festival, which advertised headliners Maroon 5 and Kelly Clarkson. According to court filings, the two men knew ticket sales were lagging far behind projections and that the event was headed toward heavy losses, but presented rosier numbers to the bank to unlock additional loans in order to pay Clarkson and cover other event expenses.

The event went on to post a $2.3 million loss. McCreight and the lead event planner were fired, the bank recovered less than $800,000 of the $2.2 million it loaned for the event, and numerous other vendors also went unpaid. Within months, deeply in debt, Go Cedar Rapids was forced to shut down.

From 2018:Iowa festival Newbo Evolve posts $2.3 million loss, fires chief executive and event planner

Both men pleaded guilty to bank fraud, and on Thursday, they appeared before a federal judge in Cedar Rapids for sentencing. McCreight was sentenced to 18 months incarceration, shorter than the 33 to 41 months recommended by sentencing guidelines, while Hargrave was sentenced to 15 months. Both also were ordered together to pay more than $1.4 million in restitution.

After his firing, McCreight was hired to run the tourism board in Dothan, Alabama, which stood by him after his charges were announced. The Dothan Eagle reported Thursday that McCreight had resigned from that position.

William Morris covers courts for the Des Moines Register. He can be contacted at wrmorris2@registermedia.com, 715-573-8166 or on Twitter at @DMRMorris.

This article originally appeared on Des Moines Register: Cedar Rapids festival bank fraud leads to prison for tourism execs