Organizers of Failed Iowa Music Festival Headed to Prison After Admitting to Bank Fraud

Two former Iowa tourism officials were each sentenced to more than a year in prison after pleading guilty to bank fraud charges related to a failed 2018 music festival headlined by Maroon 5 and Kelly Clarkson.

Aaron McCreight, 48, was sentenced to 18 months, and Doug Hargrave, 56, was sentenced to 15 months over charges that they lied to a Cedar Rapids bank in order to finance Newbo Evolve, a three-day music and cultural event held in the city in August 2018.

Prosecutors said the pair – executives at a local promotional group called Go Cedar Rapids — submitted inflated data about the event’s underwhelming ticket sales and projected revenues, and that they lied to the bank that Newbo Evolve was expected to turn a small profit.

In reality, McCreight and Hargrave expected to lose more than $600,000, prosecutors said. The festival eventually lost more than $2 million, and was unable to repay most of the loan to the bank. 97 vendors that provided services to the festival lost a combined $800,000 unpaid fees.

The two men — former executives at a local promotional group called Go Cedar Rapids — each pleaded guilty last January to a single charge of bank fraud.

In addition to the prison time, McCreight and Hargrave were ordered to jointly repay a combined $1.4 million in restitution, and each will be subject to three years of supervised release after their prison terms are complete.

Newbo Evolve was held in Cedar Rapids from Aug. 3-5, 2018, featuring performances by Maroon 5, Kelly Clarkson, The Wallflowers, Robert DeLong and others.

According to court documents, McCreight, Hargrave and Go Cedar Rapids secured $1.5 million in initial funding from a local bank, telling the lender they expected to sell 11,000 tickets to each of the two headliners and 4,000 three-day passes to the entire festival.

But three months after tickets went on sale, McCreight reported internally that tickets were “not selling as originally budgeted.” By June, the group had sold just just 6,500 total tickets and was internally projecting a loss of $644,846 — with deadlines to pay the artists and vendors looming.

“As the Newbo Evolve event dates approached, GoCR did not have enough money to, among other things, pay Kelly Clarkson, pay production costs, and buy the alcohol that was to be sold at the concert venue,” prosecutors wrote. “Without additional funding, Newbo Evolve would have to be cancelled.”

Faced with that pressure, court documents show, McCreight and Hargrave committed bank fraud. Reporting that ticket sales had “spiked” in recent weeks, they falsely told the bank that 15,000 total tickets had been sold and that the event was forecast to turn a profit of $65,653. And the move worked: the bank eventually extended their line of credit to $2,200,000.

“Ultimately, Newbo Evolve lost more than $2 million,” prosecutors wrote in charging documents. “As a result, GoCR was unable to repay much of its loan from the lending bank when the loan was due.”

When he pleaded guilty last year, an attorney for McCreight told Billboard that he was a “good man” who made a “bad decision” under “extreme pressures.”

“His motive was not based in personal greed, but in an attempt to salvage the Newbo Evolve event for the Cedar Rapids community,” said attorney William White. “Had the event sold more tickets and been profitable, it is unlikely any prosecution would have ensued. However, that was not the case, and Mr. McCreight accepts his involvement in the lending bank losing money and is extremely remorseful.”

Attorneys for both McCreight and Hargrave were not immediately available for comment on the prison sentences.

Read the full judgments against McCreight and Hargrave here: