CORPORATE CRIME REPORTER
Sporting
News Gets Non Pros Agreement after Raking in Illegal Gambling Ad Fees
20 Corporate Crime Reporter 5(3), January 23, 2006
Catch this fact pattern:
Over a period of three years, Vulcan Sports – also known as The Sporting
News – sells ad space to illegal gambling operations.
Which amounts to what the feds contend is aiding and promoting illegal gambling.
In violation of federal law.
“Taking the view of illegal wagering as mere ‘entertainment’
ignores its’ plain illegality, as well as the significant and well-documented
social problems associated with unregulated commercial gambling,” said
the U.S. Attorney Catherine Hanaway.
Now, the U.S. Attorney in St. Louis, Missouri catches the company in flagrante
delicto.
And does the U.S. Attorney in St. Louis prosecute the case?
No.
Does the U.S. Attorney in St. Louis bring an indictment against the company?
No.
Does the U.S. Attorney in St. Louis get the company to plead guilty to a crime?
No.
Instead, the U.S. Attorney crafts a non-prosecution agreement.
Cough up the illegal proceeds – says the U.S. Attorney – and we
won’t bring a criminal action against the company.
We may prosecute the individuals involved.
But as to the company – we’ll leave you alone.
Nice deal, if you can get it.
And increasingly, corporations are getting it – turn over the goods, cooperate
with the prosecutors, and there won’t be a prosecution – or the
prosecution will be deferred. (See “Crime Without
Conviction – Report Details Special Deals with Major Corporations,”
20 Corporate Crime Reporter 1(1), December 28, 2005.)
In The Sporting News case, the company agreed to forfeit $4.2 million in ad
revenues proceeds and spend $3 million over the next three years on a public
service campaign “designed to inform the public of the illegality in the
United States of commercial internet and telephonic gambling.”
The illegal proceeds were $7.2 million.
The company writes a check for $4.2 million.
And then takes out ads in its own publication worth $3 million.
Get it?
The U.S. Attorney’s office said that they wouldn’t consider the
deal they cut with the company a non-prosecution agreement, even though a crime
was committed and in the agreement, the U.S. Attorney agrees not to criminally
prosecute the company.
“A crime was committed, which makes the money forfeitable,” a spokesperson
for the U.S. Attorney’s office said.
“But we normally don’t prosecute corporations. It’s not that we are agreeing not to prosecute because we are getting the money forfeited. We are agreeing not to prosecute because it is rare that corporations get prosecuted.
But the company wanted it in writing.”
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