A key figure in the "Wonder Blunder" scam, which cost the University of Hawaii $200,000 over a bogus Stevie Wonder concert, has been charged in Pennsylvania in an unrelated case for allegedly conspiring to defraud victims who thought they were investing in concert promotions, according to a federal indictment unsealed Tuesday.
Marc Hubbard, 46, of Cornelius, N.C., and Franklin Green, 45, of Washington, D.C., were each charged with one count of conspiracy and seven counts of wire fraud, according to U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
The scheme involved approximately $2.1 million, according to Memeger.
In 2012, Hubbard was indicted in Honolulu for wire fraud in the "Wonder Blunder" fiasco, which proved an embarrassment for UH and cast a shadow over the administration of then-UH President M.R.C. Greenwood. The debacle also cost then-athletic director Jim Donovan his job.
The concert was billed as a benefit for the financially strapped athletic department, which had to refund about 6,000 tickets for a concert that Wonder and his managers were unaware of.
While UH officials at the time characterized themselves as victims of a $200,000 scam, the state Senate Special Committee on Accountability estimated that the fiasco actually cost UH $1.1 million.
In the fallout, Donovan was reassigned to a new, vaguely defined marketing role that paid him more than $200,000 annually. He then left to become athletic director at California State University at Fullerton.
At the time, the FBI said UH’s $200,000 deposit for the bogus concert appeared lost.
Hubbard unsuccessfully tried to have his Hawaii case moved to North Carolina. He pleaded not guilty and is awaiting trial here. His Honolulu attorney did not respond to a request for comment.
UH officials Tuesday had no comment on Hubbard’s indictment in Pennsylvania.
In the Pennsylvania case, Memeger said Hubbard was president of Sports Dimensions Inc., which purported to specialize in concert promotions and nightclub management, and was also president of Castle Entertainment, which purported to specialize in nightclub management. Green, a lawyer in Washington, D.C., was formerly a lawyer in Philadelphia.
According to the indictment, Hubbard portrayed himself and SDI as highly successful concert promoters and falsely represented approximately $14.27 million in ticket sales from July 2006 to Jan. 10, 2008. He allegedly promised investors an approximate return of 25 to 30 percent on their short-term investments with SDI.
Green was Hubbard’s attorney and allegedly negotiated or assisted in the negotiation of the contracts with Hubbard’s investors. Hubbard allegedly told investors that their funds were protected by a $10 million surety bond that was offered as collateral. The bond was allegedly bogus.
Instead of using the investors’ funds for concert promotions, Hubbard allegedly used the money to pay earlier investors and to pay his personal and business expenses, according to the indictment.
Investors had put up about $2.1 million and got a return on their investments valued at $326,500.
Hubbard allegedly took at least $1.8 million, while Green took approximately $333,000.
If convicted on the Pennsylvania charges, Hubbard and Green face maximum sentences of 20 years in prison, fines up to $250,000 and forfeiture of $2.1 million.
