Two Coconspirators Also Charged

BROOKLYN, N.Y. – Roslynn R. Mauskopf, United States Attorney for the Eastern District of New York, and Mark J. Mershon, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Division, announced the guilty plea of Timothy Donaghy, age 40, a 13-year veteran referee with the National Basketball Association (NBA), in connection with his participation in an illegal sports betting scheme in which he received cash for making winning gambling “picks” on the outcome of NBA games, including games in which he officiated, relying on nonpublic and other information to which he had unique access by virtue of his position as an NBA referee. In addition, a complaint was unsealed this morning charging James Battista, age 42, and Thomas Martino, age 41, for their participation in the NBA betting conspiracy.

Donaghy pled guilty this morning before United States District Judge Carol Bagley Amon to conspiracy to commit wire fraud as part of a scheme to deprive the NBA of his honest services and to conspiracy to transmit gambling information. He faces a maximum sentence of 25 years in prison. Battista and Martino are scheduled to have their initial appearances later today before United States Magistrate Judge Ramon E. Reyes, Jr., at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The charges in the complaint against Battista and Martino are merely allegations, and they are presumed innocent unless and until proven guilty. If convicted, Battista and Martino each face a maximum sentence of 20 years in prison.

Based on the plea proceedings and the court filings, for the past 13 years, including the 2006-2007 NBA season, Timothy Donaghy was employed as an NBA referee. Approximately four years ago, he began placing bets on NBA games, including games he officiated. At his guilty plea proceeding this morning, Donaghy admitted that in approximately December 2006 he began to receive cash payments from his coconspirators in exchange for providing them with betting recommendations or “picks” on NBA games, including games Donaghy officiated. Donaghy and a coconspirator agreed on a code that Donaghy would use over the telephone to indicate his picks. Donaghy admitted that he received payments from his coconspirators for each correct pick. Donaghy received no payment if his pick was incorrect.

In determining his picks for NBA games, Donaghy admitted that he relied on nonpublic and other information to which he had unique access by virtue of his position as an NBA referee. That information included his knowledge of the officiating crews for upcoming NBA games, the interactions between certain referees and certain players and team personnel, and the physical condition of certain players. In addition, Donaghy compromised his objectivity as a referee because of his personal financial interest in the outcome of NBA games. Donaghy admitted that he concealed this scheme from the NBA in order to prevent its detection.

“The participation of an official of one of the world’s premier sports leagues in an illegal betting scheme involving his own sport demonstrates the corrupting allure of easy money,” stated United States Attorney Mauskopf. “Today’s guilty plea and charges serve as a warning that seemingly easy money often comes at a high price.” Ms. Mauskopf praised the work of the FBI’s New York Division, the agency responsible for conducting the government’s investigation, and added that the investigation is ongoing.

FBI Assistant Director-in-Charge Mershon stated, “The appeal of legitimate professional sports is that the outcome of the competition is determined solely by the competitors. That an official – responsible to his sport, its teams, its players, and fans, and duty-bound to be impartial and incorruptible – placed bets on games he officiated undermines everyone’s faith in the integrity of the competition.”

The government’s case is being prosecuted by Assistant United States Attorneys Thomas J. Seigel and Jeffrey A. Goldberg.

Background

The NBA, headquartered in New York City, is a global sports and entertainment organization that includes a men’s professional basketball league of 30 teams located throughout the United States and Canada. The NBA employs approximately 60 referees who officiate pre-season, regular season, and playoff games between NBA teams. Each game has an officiating crew of three referees. NBA referees are subject to a collective bargaining agreement and to rules of conduct set by the NBA. Those rules of conduct require that NBA referees conduct themselves according to the highest standards of honesty, integrity, and professionalism, as well as refrain from any conduct that may impair the faithful and thorough discharge of their duties. Among other things, NBA referees are generally prohibited from having any involvement in sports betting or bookmaking. In particular, NBA referees are prohibited from placing bets on NBA games and from providing information to others for the purpose of assisting them to place bets.

The NBA does not disclose the identities of an officiating crew to the public, or to NBA teams, until game time. However, the NBA does prepare master referee schedules listing the officiating crews for upcoming NBA games. These schedules are not disclosed to the public or to NBA teams. NBA referees are prohibited from disclosing upcoming referee assignments and other proprietary NBA information.

During the NBA season, professional bookmakers routinely predict the team favored to win each NBA game and set a point spread by which the favorite is expected to win. This prediction is referred to as the “betting line.” If a bettor selects the favored team, the better wins if that team wins the game by the predicted point spread or by a greater number of points. If a bettor selects the team that is not favored, the better wins if that team wins the game or loses by a lesser number of points than the predicted point spread.