By Jordan Kobritz
Yahoo Sports reported last week that a federal grand jury is investigating MLB’s international dealings, news which reportedly sent shock waves through the sport.
A grand jury probe is serious business, especially at the federal level given the unlimited resources of the government and the multiple agencies at their disposal. Grand juries decide whether probable cause exists to bring criminal charges and as we have recently seen in the Russia investigation, prosecutors aren’t limited in the scope of their inquiry nor in the charges that may be brought. They have successfully prosecuted defendants on charges unrelated to the original purpose of the investigation.
According to sources who spoke to Yahoo Sports, the FBI and the Department of Justice are involved in the probe, which could lead down a number of avenues given MLB’s widespread footprint in Latin America. Subpoenas were issued to club officials and others who may have been involved in illegal activities related to violations of international signing rules. MLB has a history of infractions in this area and to its credit, has taken measures to punish violators and to deter future illegal activity.
In July 2016, MLB penalized the Boston Red Sox for rules violations by prohibiting them from signing any international amateurs for a year. In addition, five prospects were declared free agents. Two months later MLB suspended San Diego Padres general manager A.J. Preller for 30 days for violating the same rules, although his violations were more egregious than those committed by the Red Sox. The violations occurred in 2014 while Preller was head of the Texas Rangers’ international scouting operations.
Last fall MLB took more extreme measures by banning former Atlanta Braves general manager John Coppolella for life after an investigation revealed the team had also run afoul of international signing rules.
Whether those actions will serve to insulate MLB against federal charges remains to be seen. The adage ‘where there’s smoke there’s fire’ would presumably apply here. The cases mentioned above are likely the tip of the iceberg, not just for MLB teams but agents and others connected to the seamy underworld of drugs, money and human trafficking that permeates the movement of talent from Latin America to the Major Leagues.
Department of Justice lawyers who specialize in violations of the Foreign Corrupt Practices Act are rumored to be heading the investigation, which suggests bribery of foreign officials may also be an area of interest for the grand jury.
This isn’t the first time federal authorities have investigated MLB for criminal activity involving international signings. In 2008, the Chicago White Sox fired senior director of player personnel David Wilder and two scouts for skimming signing bonuses paid to Dominican prospects. After the feds investigated the matter, Wilder plead guilty to mail fraud in 2013 and was sentenced to two years in prison.
Could MLB executives end up in prison as a result of the current probe? Only time will tell, but the grand jury investigation has folks connected to baseball on edge, for good reason.
Jordan Kobritz is a non-practicing attorney and CPA, former Minor League Baseball team owner and current investor in MiLB teams. He is a professor in the Sport Management Department at SUNY Cortland and maintains the blog, sportsbeyondthelines.com.The opinions contained in this column are the author’s. Kobritz can be reached by email at jordan.kobritz@cortland.edu.
