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Monday, August 04, 2008

ESPN: Yankee prospects may have been forced to kick back bonus money

Jailen Peguero...and probably other places!

Major League Baseball investigators are looking into accusations that several New York Yankees prospects from the Dominican Republic were forced to kick back portions of their signing bonuses to one or more team employees, several sources told ESPN.

The revelation is one of several developments in an ongoing investigation of a financial scandal involving the signing of players from the Dominican Republic. Last week, the Red Sox’s Dominican scouting supervisor, Pablo Lantigua, was fired after MLB investigators confronted him about allegedly skimming signing bonuses, according to an MLB source.

Sources also told ESPN that the investigation is expected to implicate roughly 20 people on “a handful” of teams before it is complete. Investigators also have expanded their probe into Venezuela, where many major league clubs have player academies. “Things are coming to a head,” one source familiar with MLB’s investigation said.

Repoz Posted: August 04, 2008 at 09:51 PM | 9 comment(s) Login to Bookmark
  Tags: international, yankees

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   1. Gamingboy Posted: August 04, 2008 at 10:00 PM (#2889780)
The Empire uses kick backs? How FIENDISH!



In reality though, I'm guessing this is ridiculously common for every team, one of the many problems of the scouting situation in the DR and other places.
   2. Curse of the Andino Posted: August 04, 2008 at 10:59 PM (#2889863)
Say what you will, this is one MLB scandal that is not likely to center around the Baltimore Orioles...

... Baltimore has had-limited-at best scouting in the DR for the past three decades.
   3. Swedish Chef Posted: August 04, 2008 at 11:12 PM (#2889876)
How can this scam possibly work? Is there any incentive for the players to keep quiet about it after they sign?
   4. Don Guillote (The Cheat) Posted: August 04, 2008 at 11:19 PM (#2889887)
How can this scam possibly work? Is there any incentive for the players to keep quiet about it after they sign?

I know this goes without saying, but RTFA

"The families went along with it because they were still getting the money," one source said. "[The scouts] were really stealing money from the clubs."


The scouts quickly inflate the value of a player, and instill a sense of urgency with their club (we have to jump on this player now) such that the player is still going to get his money, probably more than his true worth, but the scouts are taking 15 or 20% (or whatever it is). They're stealing from the club, not the players.
   5. Srul Itza Posted: August 04, 2008 at 11:21 PM (#2889890)
They're stealing from the club, not the players.

If they're stealing from the Yankees, then, what is the big deal?

Most of the other MLB teams also have their hands in the Yankees' pockets.
   6. philly Posted: August 04, 2008 at 11:33 PM (#2889904)
Investigators are looking at the involvement of Yankees scouting official Carlos Rios, sources said.


The Yankees tend to credit multiple international scouts for each player signing. As a result of that Rios has been at least partially credited with signing most of the Yankees recent notable Latin players.

He was solely credited with signing Robonson Cano.

He was one of two or three scouts credited with signing - Dioner Navarro, Melky Cabrera, Joaquin Arias, and Jesus Montero.

It's very hard to to tease out how important any one scout is, but from the surface it would appear that if the Yanks were forced to fire Rios that would be a blow to their latin scouting efforts.
   7. Victor Broccoli Posted: August 05, 2008 at 12:39 AM (#2890004)
Hearing that this is apparently common practice (Red Sox, ChiSox, Nats also implicated), it seems as if front offices do not have nearly as tight control over their Latin America scouting operations as they do other areas.

Is that actually the case?
   8. Walt Davis Posted: August 05, 2008 at 01:34 AM (#2890133)
Most of the other MLB teams also have their hands in the Yankees' pockets.

True, but at least the MLB teams invest those revenues in putting a better team on the field.

(I almost said that with a straight face.)

The "big" question from the team perspective is whether the scouts inflated the worth of these prospects -- which of course they had every incentive to do. But, although it sucks for both the Yanks and Cano, they're probably not that worried that some of his money ended up in the wrong pocket. But if they paid $500,000 to a kid that the scout never thought would make it out of rookie league then that's a problem for the Yanks.

Why wouldn't prospects report it? I assume there's some chance they (or their family members) could be charged as co-conspirators ... especially the untalented ones. Someone like Cano could come forward with little worry (and could probably get immunity) but not most others.

I also can't help but wonder if this points to a certain amount of "collusion" in LA scouting -- i.e. you should only be able to get away with this when there's little/no competitive bidding. If some dirty scout says he can get you signed for $500 K with a $100 K kickback, where's the clean scout offering $425 K? Either it's pretty widespread or a lot of these signings are truly fraudulent or the teams/scouts have basically divided up the market ("hey, I saw him first"). The story about the one Yankee scout getting a piece of everybody (if true) _might_ be consistent with the latter -- you want access to a kid from X, you gotta go through this guy.
   9. Don Guillote (The Cheat) Posted: August 05, 2008 at 01:56 AM (#2890169)
If some dirty scout says he can get you signed for $500 K with a $100 K kickback, where's the clean scout offering $425 K? Either it's pretty widespread or a lot of these signings are truly fraudulent or the teams/scouts have basically divided up the market ("hey, I saw him first"). The story about the one Yankee scout getting a piece of everybody (if true) _might_ be consistent with the latter -- you want access to a kid from X, you gotta go through this guy.

I can only speak with any real authority on the White Sox situation, but the point is that there's enough of a gap in money for the player that they don't care. For the Sox, this probably refers to guys like Paulo Orlando, Anderson Gomes, Po Yu-Lin, and any number of Dominican signings last year, namely Juan Silverio. These are guys who were relatively lightly pursued who magically ended up with 6-figure bonuses. Rumor has it that some of these guys got bonuses as much as 10 times what other teams would have offered.

I imagine in the Yankees and Red Sox case it might be even easier to disquise, simply because they have enough resources to have more than a handful of 6-figure (and up) bonus babies. And it wouldn't be hard to hide because much like when a lineman being recruited by Michigan and Ohio magically goes from a 3-star recrtuit to 4-or-5-star blue chipper, when the Yankees or Red Sox get involved the money is expected to go up. So if the Yanks suddenly bid $150K, or $300K, or $500K more than their nearest competitor, nobody bats an eye because it's the Yankees.

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