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Saturday, June 22, 2024

Subpoena Issued in Federal Probe of Washington Commanders

  • The U.S. Attorney’s Office of Eastern Virginia's investigation into financial irregularities remains ongoing.
  • The probe includes allegations made public as part of a House Oversight Committee inquiry.
Commanders Bill
Geoff Burke-USA TODAY Sports

As the potential sale of the Washington Commanders inches forward, a federal investigation into the franchise continues as well.

The U.S. Attorney’s Office of Eastern Virginia opened an investigation into the team last year over financial irregularities first reported by Front Office Sports. The case remains open, and at least one subpoena has been issued as part of the probe, two sources with knowledge of the inquiry told FOS. 

“The team has been fully cooperating with the Eastern District of Virginia since it received a request for records last year,” Commanders counsel John Brownlee said in a statement to FOS. “The requested records only relate to customer security deposits and the team’s ticket sales and revenue. The team will continue to cooperate with this investigation.”

A spokesperson for the U.S. Attorney’s Office of Eastern Virginia declined comment.

While it’s unclear the full scope of the investigation, the House Oversight Committee’s inquiry into the Commanders is a major focal point of the probe.

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Days after FOS laid out many of the allegations, Carolyn Maloney — the chair of the Oversight Committee at the time  — wrote an April letter to the Federal Trade Commission in which she wrote “senior executives and the team’s owner, Daniel Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of financial conduct that victimized thousands of team fans and the National Football League.”

Messages left with the U.S. Attorney’s Office of Eastern Virginia were not returned. 

A copy of the letter was sent to the attorneys general in Virginia, Maryland, and D.C. that detailed the allegations: 

  • The team “created artificial barriers to discourage customers from requesting” refundable deposits due to them. The Commanders paid a $250,000 fine in a settlement agreement with Maryland, and the D.C. Attorney General filed two lawsuits over the allegations. 
  • The Commanders “repeatedly concealed ticket sales revenue that should have been shared with the NFL.” This was done by using “two sets of books,” one shared with the league and the accurate version “shown to Mr. Snyder.”
  • Commanders executives “intentionally” underreported ticket revenue in its database system by “falsely processing or misassigning” ticket revenue from the team.

In a 102-page letter, lawyers for the Commanders pushed back on Congress’ allegations they said: “relied on uncorroborated, false testimony of a single disgruntled former employee.”

“Had the Committee posed any of these questions or requests to the Team, the Team could easily and fully have rebutted each allegation, as the complained-of conduct did not occur, plain and simple,” wrote attorney Jordan Siev, a partner at the firm Reed Smith.

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Along with the federal investigation, Virginia’s Office of the Attorney General — which launched an investigation after it had received the FTC letter — and a second outside NFL investigation into the Commanders led by former SEC chair Mary Jo White are also ongoing.

“Committee Democrats are pleased by reports that the findings of our investigation have sparked additional inquiries,” a spokesperson for the committee said in a statement to FOS. “The Committee made a referral to the Federal Trade Commission last Congress which resulted in the Commanders refunding wrongfully withheld seat deposits to hundreds of dedicated fans.  No additional referrals were made during the investigation.”

News of the federal investigation was first reported by ESPN hours after owner Snyder announced in November he was exploring a sale of the team he’s owned since 1999. 

Multiple potential owners have visited over the last couple of weeks, including HB Sports & Entertainment co-founder Josh Harris

FOS previously reported Snyder is seeking as much as $7 billion for the club, and the first round of bids topped out at $6.3 billion.

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