Former White Sox director of player personnel Dave Wilder is among three former White Sox employees indicted today on federal charges for allegedly skimming approximately $400,000 in signing bonuses from international signings.
A federal grand jury returned a seven-count indictment alleging that Wilder and former White Sox international scouts Victor Mateo and Jorge Oquendo Rivera defrauded the organization by artificially inflating the value of players and skimming money off the bonuses from players between December 2004 and February 2008. Wilder and Oquendo are both charged with seven counts of mail fraud. Mateo is charged with three counts of mail fraud.
“The defendants were supposed to recruit players by paying amounts of money that matched their skills and were no greater than the amount needed to sign the players," said Patrick Fitzgerald, U.S. attorney for the northern district of Illinois. "Instead, the indictment alleges that the defendants secretly inflated those signing amounts to fund kickbacks for themselves."
The indictment did not name specific players or the specific amounts of the kickbacks the three allegedly took, but the seven mail fraud counts allegedly stem from the mailing of checks ranging from $30,000 to $525,000. On Nov. 15, 2007, the White Sox signed Dominican outfielder Rafi Reyes, 16 at the time, to a $525,000 bonus. Reyes, now 19, has never made it out of the Rookie-level Dominican Summer League, where from 2008-2009 he hit .182/.244/.261 in 77 games. The White Sox moved Reyes to the mound this year, where he allowed seven runs in 6 1/3 innings in the DSL.
According to the indictment, Wilder, who supervised the White Sox's Latin American signings, was allegedly aware of his scouts inflating their reports on players and their values. For bonuses of less than $100,000, Wilder was able to authorize those signings himself. Wilder needed the approval of general manager Ken Williams to authorize signings of $100,000 or more and, according to the indictment, allegedly misled Williams intentionally about the fraud to conceal the kickbacks that he and his scouts were receiving.
After the player passed Major League Baseball's investigation into his age and identity and the contract was approved, the White Sox would send a check from a Chicago bank account to the player or, if the player had a Mexican League team, to the Mexican team's representative.
When players were signed from the Dominican Republic, the White Sox sent the bonus check to MLB's Santo Domingo office or through its offices in New York, from which the player would receive his check. When the team signed Latin American prospects outside of the Dominican Republic, the White Sox delivered the check to the player's signing scout, who was responsible for delivering the check to the player.
According to the indictment, Oquendo and Mateo allegedly targeted players from whom they could receive a kickback on their bonuses, having discussions with players and their representatives about doing so before agreeing to terms. The indictment states that Oquendo allegedly had similar conversations when dealing with teams who controlled the rights to players in Mexico.
"These defendants allegedly defrauded their employer and enriched themselves by taking advantage of vulnerable ballplayers, who were anxious to pursue their dreams of stardom in the major leagues” said Robert D. Grant, special agent in charge of the Chicago office of the Federal Bureau of Investigation.
Wilder joined the White Sox in November 2003 as a special assistant to Williams, then took over as farm director the following month. He served in that capacity until his promotion to director of player development prior to the 2007 season.
Rivera scouted Latin America for the White Sox between November 2004 and October 2007. Mateo worked for the club as a scout in the Dominican Republic from November 2006 until May 2008.
In April, the White Sox hired Jerry Krause to head up the organization's international scouting efforts.
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