FBI, IRS & AUSA Launches Joint Investigation Into OJ2 Scandal

by Nestor on Jun 3, 2008 6:37 PM PDT in Basketball

Over the weekend we heard about the California AG launching their investigation into the OJ scandal.

Now comes the entire kitchen sink: FBI, IRS & the US Attorney's offices launches investigation into the OJ2 mess:

Special agents for the FBI and IRS and members of U.S. Attorney's office have launched a joint investigation into "possible income tax evasion and fraud arising from the misuse of charitable organization funds," according to an attorney retained by Louis Johnson, a member of former USC guard O.J. Mayo's inner circle until three months ago.

Anthony Salerno, Johnson's Los Angeles-based attorney, said the scope of the various agencies' investigation is still unclear.

Johnson retained Salerno shortly after "Outside the Lines" reported on May 11 that Mayo -- a projected lottery pick in the June 26 NBA draft -- received thousands of dollars in cash, clothing and other benefits while he was playing in high school and for USC this past season, possibly in violation of NCAA rules.

The NCAA, Pac-10 and the National Basketball Players Association are investigating the allegations made by Johnson.

When asked who the agencies intended to interview for their investigation, Salerno said "the parties previously identified by ESPN in its reporting and also additional parties that haven't been disclosed, but I don't feel comfortable revealing [their names] at the moment out of respect for the confidentiality of the investigation."

Said Lourdes Arocho, a spokesperson for the Los Angeles FBI field office: "We don't confirm or deny investigations." Spokespersons for the IRS and the U.S. Attorney's office for the Central District of California also declined to comment.

Salerno would not comment as to when a meeting between his client and the various agencies will take place. When reached by telephone and asked about the investigation, Johnson declined to comment.

"I would expect the authorities to investigate the matter very thoroughly," Salerno said, "including issuing subpoenas for testimony and documents."

Grab the popcorn.

GO BRUINS.

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BREAKING: $UC's Response

by Tydides on Jun 3, 2008 7:44 PM PDT 0 recs

Can this actually be happening?

Someone is actually taking action that could conceivably have a negative impact on justsc? Boy oh boy, are heads going to roll. I don’t mean in the athletic department, of course. But all those lawyers and spin meisters are going to be out on their collective derrieres for letting this investigation actually happen. They’re supposed to be allowing only Mr. Magoo to look in the company records, not people who have a chance of actually finding something.

by Fox 71 on Jun 3, 2008 8:18 PM PDT 0 recs

I guess all the press finally got to them. I know the IRS has been cracking down on misuse of charitable orgs, but I’m surprised because they are also very understaffed. But, when the possible violations put all over the media I suppose it’s hard to ignore (although it hasn’t been in the past). Now, let’s see if they prosecute this case like they do others. Let’s make an example of these SCAM artists. Let’s Wesley Snipes them!

[I’m focusing on the IRS because I don’t think the NCAA or Pac 10 will unilaterally act on this. Maybe if the IRS finds them guilty, the NCAA will run out of excuses.]

by UCLAbruin920 on Jun 3, 2008 8:50 PM PDT up 0 recs

IRS

Maybe now the IRS will also take a look at the hundreds of thousands given to Bush and his family.

by bornagainbruin on Jun 4, 2008 6:50 AM PDT up 0 recs

They should… that’s unreported income.

by UCLAbruin920 on Jun 4, 2008 8:28 AM PDT up 0 recs

sc Can Skate On This Without Much Effort

The focus is on the potential criminal behavior of Mayo, his supporters and his entourage. Apparently, the common thread that brings all of these resources into the fray is the abuse of the charity involved—which has nothing to do with sc.

sc’s position will be—“He’s a criminal and he scammed us. Our only mistake was believing him and the people around him.”

In my eyes, this scenario is actually better for sc than many of the alternatives. The focus will be off campus, and may well stay off campus.

Also, but for the misuse of a charity, Bush’s violations are far more serious and a much greater threat to sc.

I’m sure sc would rather take its stand on Mayo than Bush and it looks like that’s the way things are playing out.

If they get by on Mayo they will use it to prove their “cleanliness” and elevate their position hoping that the halo protects in the Bush case.

sjh

by Class of 66 on Jun 3, 2008 8:51 PM PDT up 0 recs

But it's still cash being provided to a player

which seems to me to be a little bit more problematic than a sack of groceries left on a front porch.

So far, justsc has been saying, in effect, that they are “100% not guilty, your Honor,” and that they’re going to “find the real killers.” Not only is justsc as an institution totally without blemish, but so are bu$h, OJ2, et al. This investigation into a charity SCam should certainly dispel the notion that justsc is squeaky clean. And once it is established that there’s dirt, then the focus isn on the greater SCandal – what did justsc know and when did they know it.

I don’t think justsc gets any mileage at all if one of their two biggest stars of recent vintage is proven to have taken money under these circumstances. Once the money flow is established, then even as big an institutional cuckold as the ncaa (or even the PAC 10) will have to decide that they better take a look at things.

by Fox 71 on Jun 3, 2008 9:35 PM PDT up 0 recs

I’m with Fox on this. A recipient of stolen goods can be liable if he or she knew or should have known of the illegal source of funds..

Besides that, it’s one thing to violate NCAA rules and another to violate Federal Tax and possibly Fed & State criminal laws. It doesn’t makes $C look any better to be tied to criminal activity. I’m sure they would rather be caught up in run-of-the-mill (for $C, anyway) NCAA violations.

by UCLAbruin920 on Jun 4, 2008 1:13 AM PDT up 0 recs

Hmm

I didn’t think of this before. I doubt if OJ2 declared his income, so he’s looking at tax fraud. If the government wants to exert some pressure on OJ2 to cooperate fully (which to me means to tell all about the filth in heritage hall), it wouldn’t be too hard just to lay a picture of Wesley Snipes on the table and ask OJ2 whether he thinks an orange jump suit would exactly coincide with his new preppy look.

And one more thought. How about a lawsuit called “The People of the United States ex rel class of 66 v. bu$h” (and that would be Reggie, not any politician.) Can you do a whistle-blower suit on a claim of tax evasion or tax fraud? If you can, then let’s bust some chops. You know it’s a fact that at least OJ2 didn’t pay taxes on his plasma TV, and you also know that the steady stream of cash and other benefits being paid to players and their families are not getting declared on tax forms. So we don’t have to find another type of plaintiff to get the discovery ball rolling. And I think attorneys fees are allowed in a whistle-blower case.

OK, FBU’s (FBU’s = fungible billing units = junior associates), someone do the research and find out if a whistle-blower suit is possible when the whistle-blowing is about tax evasion or tax fraud.

by Fox 71 on Jun 4, 2008 4:03 AM PDT up 0 recs

I didn’t do any research to back this up, but generally merely being a taxpayer does not give you standing to file a suit. Whistleblowers are typically employees of a company who file a suit under the False Claims Act. The FCA, however, explicitly excludes tax fraud/evasion.

I believe this is in the hands of the authorities.

by UCLAbruin920 on Jun 4, 2008 8:37 AM PDT up 0 recs

HAHAHA sucks to be sc

by chenalex on Jun 3, 2008 8:52 PM PDT 0 recs

When does it NOT suck to be ‘SC????

by impaulv on Jun 4, 2008 10:36 AM PDT up 0 recs

Bruins in the news for three NCAA Championships in one month. Meanwhile, across town . . .

Film at 11

by Telemachus on Jun 3, 2008 9:32 PM PDT 0 recs

Man, I get tied up at work for a couple of weeks and THIS happens?

Geez, Nestor, this isn’t throwing the kitchen sink at someone.

This is called:

(a) throwing the kitchen sink at them,
(b) nailing them to the floor,
(c) kicking them in the crotch with hockey skates,
(d) locking the doors,
(e) and setting the house on fire.

"In this program your passion bucket must be full to play SC." -- CRN, to Dan Patrick, 1/2008

by Meriones on Jun 3, 2008 9:49 PM PDT 0 recs

that’s quite a visual.

by UCLAbruin920 on Jun 4, 2008 1:14 AM PDT up 0 recs

This can only be good

Let’s face it: the NCAA and Pac-10 investigations were going to be a farce from the jump. It would have been a Mr. Magoo investigation that let to some slaps on the wrist, some lamenting from across town, and ultimately, OJ2, Guillory, et al would have been Trotsky-ed to save U$C.

I know a lot of the older hands in the law aren’t big fans of my brethren who prosecute, which I can’t blame you for in light of Gonzalez’s tenure at Justice. The line AUSAs, FBI field agents, and IRS-CID agents who work these cases every day, however, are fair-minded and not beholden to any agenda other than justice.

If anything, the Department has shown it is more than willing to go after the biggest names in sports and entertainment (Barry Bonds, Marion Jones, Wesley Snipes, etc.). The NCAA and Pac-10 have a vested interest in protecting their cash cow over in South Central, so I don’t think any of us were expecting a fair and impartial investigation.

Now that the full power of the federal government has been directed at OJ2, DBA, Guillory, and U$C, the truth, whatever it is, is going to come out. The media will run with it and the NCAA and Pac-10 won’t have any choice but to accept the facts: that OJ2 took money; that Floyd knew damn well about it; and that despite Guillory’s reputation, U$C let him have free reign inside the basketball program.

When that all comes out, as it will now that there is an impartial party investigating, a party with the power to search, seize, subpoena, and punish, the NCAA will only have two choices: either punish U$C and do so harshly or be exposed as the hypocritical farce it is.

Either way, we win.

by norcald503 on Jun 3, 2008 9:57 PM PDT 0 recs

Protecting a cash cow

Norcald, you said what many others have said here: “The NCAA and Pac-10 have a vested interest in protecting their cash cow over in South Central,...”

How does this work? If we lay aside any bribes by justsc to big shots at the ncaa, how does the flow of funds by justsc to the ncaa work? Would that flow increase or decrease if justsc is put on probation? And why? Is there somehow a tie to TV ratings, or to attendance at the crapaseum?

It seems quite logical to me to think that the ncaa is getting money from justsc, and it’s equally logical to think that there are lots of payments to the “favorite charities” (charities similar to the “National Organization of Sickle Cell Prevention and Awareness Foundation” or whatever it’s called). But it isn’t logical to me to think that the overall flow of legal cash into the ncaa is impacted one way or another by the presence or absence of justsc being strapped to the gurney and wheeled into the execution chamber.

by Fox 71 on Jun 4, 2008 3:54 AM PDT up 0 recs

Yes, It Can Only Be Good for Society

As the oldest of the older hands, I have deep respect for prosecutors - both Federal and state - and am really upset by the way they were treated by this administration. One of my good friends is an ex-Bush appointed- US Attorney who is more than a bit disillusioned by his current state of now being in private practice. I’ve done business with another who is in the same boat. Over the last few years, I’ve done a significant amount of consulting with Federal prosecutors and have just been retained on an interesting case that will touch the high school sports world.

In that capacity, I’ve worked with the ground troop agents who build these cases and agree that they are professional and dedicated.

On the bigger issues in this case, the abuse of a charitable foundation and the violations of the tax laws, I have not doubt that there will be a serious investigation and likely charges.

As I’ve written twice, in this thread, my only doubt is whether this will reach to sc and, if so, what the result will be.

The investigations will most likely show tax violations (abusing the charity, Mayo and Guillory and maybe others Income Tax, and the usual “wire fraud” charges.) sc will throw Mayo under the bus on this stuff.

The only way sc is in trouble is if the NCAA decides to do something.

You are very right. If the NCAA does not act, it is a sham.

However, there are many of us who believe it is a sham, now. But for the charity angle, similar cases could likely be made against Reggie Bush and his parents. Did he and he family pay taxes on the money he took (income or gift)?

One great benefit of the current investigation would be if it led to a similar use of resources to investigate Bush.

At a minimum, at the end of the day, sc will be tarnished—but only if it is possible to find one spot of sc that is not so tarnished that more would show.

And, if the NCAA does nothing, more people will see it the way we see it, the make believe king with no clothes on.

sjh

by Class of 66 on Jun 4, 2008 5:04 AM PDT up 0 recs

Let me rephrase

Let me cut down my verbose post to my simple premise: once the truth is exposed by the Government, the NCAA has only two choices: punish U$C or be exposed as the farce we all know it is.

I think the difference is that right now, we, here at BN, strongly believe the NCAA is a joke, but the media, and as an extension the general population, has failed to realize that. U$C is such a high-profile school though, that failure to act in the face of such obvious cheating will finally make the rest of the country sit up and take notice.

As for Fox’s point, I believe (although not 100% sure; perhaps this is an issue someone can look into) member schools and conferences give the NCAA a cut of the television revenue they generate. Likewise, every hat, shirt, and jersey sold (at least the licensed ones), have that little official NCAA sticker on it. I believe (again not 100% sure) that the NCAA receives a cut from that revenue. You raise a very interesting point Fox and I will see what information I can dig up on the tie between the NCAA and member schools and conferences.

by norcald503 on Jun 4, 2008 8:19 AM PDT up 0 recs

I would be surprised if USC is held accountable

Although I am glad to hear that other agencies besides the pac-10 and the NCAA are going to conduct investigations, I believe that Guillory and his other homies are the only ones to be caught holding the bag. OJ2 might even turn witness against them to save face and continue his “I didn’t know this was going on” defense. Timmeh might be collateral damage to show the pac-10 and ncaa that sc is cleaned up.

It will be interesting to see what happens.

by PasadenaBruin on Jun 3, 2008 10:08 PM PDT 0 recs

I Agree With You

I am not justifying sc’s behavior in any way. You can’t spell “scum” without sc.

But, from a practical perspective, as bad as this may be, UNLESS THEY TURN OJ2 AGAINST sc, I don’t see this particular investigation landing on Figueroa. And, if it does, sc will throw Mayo under the bus.

It will still be up to the NCAA to go after sc.

One glimmer of light—it may have to. This may bring so much mainstream attention to the situation that the NCAA will be forced to look at the connection to sc.

I think the case against sc was just as strong 2 days ago as it is after all of this.

Mayo was recruited in an “odd way”. He came via an intermediary of questionable background. While on campus, this poor kid had expensive stuff.

There was more than enough for the NCAA to use to hit sc, and it didn’t.

And, don’t get me started on Bushgate.

My prediction, and I don’t like it: sc skates on Mayo.

sjh

by Class of 66 on Jun 4, 2008 4:46 AM PDT up 0 recs

Scum, Scandal, Suck

What do all three of those works have in common?

My prediction, basketball gets thrown under the bus to protect football. Yes, the NCAA is a joke, but I think with state and federal prosecutors looking at this, there is no way they can’t take action. Perhaps I’m still too young and naive, but that’s what my gut is telling me.

by bruinbabe2000 on Jun 4, 2008 8:35 AM PDT up 0 recs

Exactly

Look for much of the damage incurred by the basketball program to be self-imposed, thereby taking pressure off of Heritage Hall, while any damage to the football program, if any, will come externally.

My prediction: SUC basketball: Probation, loss of scholarships, forfeiture of ‘07 wins and tourney appearance (lol), 1 or 2 year post season ban. SUC football: Bu$h loses Heisman. That is all.

Remember, Mayo took 30 K, while Bu$h took 300K.

by godblesstyus95 on Jun 4, 2008 9:35 AM PDT up 0 recs

When you actually allow another OJ #32

to be the face of your athletic department… you deserve everything you get. I still can’t believe they had the audacity to promote him the way they did. You would think they would have had someone from the business school give the AD some marketing advice.

by UCngLA on Jun 4, 2008 1:35 AM PDT 0 recs

it always ALWAYS comes down to taxes

if you wanna get caught doing something bad, just withhold cash from our govt. they’ll get you on it every time.

by jjreicher on Jun 4, 2008 8:54 AM PDT 0 recs

How is it...

that the National Organization of Sickle Cell Prevention and AWARENESS Foundation doesn’t have a website?

I was curious and did a search and couldn’t find much on the org, not even a website. I don’t see how it can make anyone AWARE of anything without a website!

Shady.

by UCLAbruin920 on Jun 4, 2008 1:33 PM PDT 0 recs

Well, we're all aware of it NOW, aren't we?

Maybe they figured if they can build awareness illegality, then everything would be good. That’s perfect justsc logic, in any event.

by Fox 71 on Jun 4, 2008 1:41 PM PDT up 0 recs

You're Right...

...Odd that it didn’t link directly to OJ Mayo’s facebook.
(Sorry. Couldn’t resist, and, of course you’re right.)

Love My Bruins

by Bruingirl83 on Jun 4, 2008 1:45 PM PDT up 0 recs

I've got to start proofreading

awareness through illegality.

sheesh!

by Fox 71 on Jun 4, 2008 1:42 PM PDT 0 recs

Just Thinking...

How does a completely sham “charitable” organization, with no real credit history, get an American Express card? Do they use another organization’s identity—the theft of another, solvent organization’s “identity” if you will? Or does an individual with an established credit history co-sign for it, and, in that case, is that identity legitimate, or stolen?

Or has the sham organization been in extistence long enough to have actually built a decent credit history for itself, thereby adding to its apparent legitimacy?

Love My Bruins

by Bruingirl83 on Jun 4, 2008 2:34 PM PDT 0 recs

Getting a credit card

doesn’t seem that hard. I think there are only two qualifications – you either have to ask for one or you have to accept one if one of the companies asks if you want it.

by Fox 71 on Jun 4, 2008 7:14 PM PDT up 0 recs