Two organizers behind a failed Iowa music festival called Newbo Evolve have each been sentenced to more than one year in federal prison.
Judge C.J. Williams just recently handed down the sentences to 56-year-old Doug Hargrave and 48-year-old Aaron McCreight, both of whom pled guilty to one count of bank fraud in January of 2022. Washington-born Hargrave and Alabama-born McCreight had held executive positions (finance director and president/CEO, respectively) at a nonprofit called Go Cedar Rapids, which arranged the three-day Newbo Evolve happening.
And according to a summary from the U.S. Attorney’s Office for the Northern District of Iowa, Go Cedar Rapids booked Maroon 5 and Kelly Clarkson as Newbo Evolve headliners in 2018. As the early August festival and “cultural event” approached, though, its NPO organizer “did not have enough money to, among other things, pay Kelly Clarkson and buy the alcohol that was to be sold,” per the mentioned synopsis.
This insufficient funding then prompted McCreight and Hargrave to approach Des Moines-headquartered Bankers Trust and request a loan increase by providing fabricated ticket-sale, revenue-projection, and expense data. These “false and fraudulent” details, featured in a Newbo Evolve budget for 2018, resulted in the financial institution’s upping the loan size from $1.5 million to $2.2 million.
Predictably, given the aforesaid guilty pleas and today’s sentencing, Newbo ultimately lost about $2.3 million, per the government-penned summary as well as local reports. The bank itself is said to have been on the hook for $1,442,231.25 after the dust settled, and 97 Newbo vendors failed to receive a cumulative $800,000 in owed payments.
(Go Cedar Rapids, which ceased operating in October of 2018, sold 8,340 tickets to Newbo Evolve, gave away 3,804 more tickets, and moved 602 three-day passes at around $400 a pop, the Des Moines Register reported. A “local hotel-motel tax” accounted for $1 million of Go Cedar Rapids’ $2 million annual budget, the same outlet indicated, and Cedar Rapids itself is said to have advanced half a million dollars to bankroll Newbo.)
McCreight has been sentenced to 18 months behind bars, while Judge Williams handed Hargrave a 15-month sentence. Additionally, the court has ordered both men to jointly pay $1.44 million in restitution to Bankers Trust and to serve three years of supervised release after leaving prison.
Needless to say, the unfortunate situation underscores the far-reaching challenges (fiscal and otherwise) associated with making music festivals work. Moreover, Newbo Evolve took place well before COVID-19 lockdown measures decimated the live sector – and before rampant inflation dramatically increased the costs of touring, operating venues, and organizing crowd-based entertainment events.