Three former Chicago White Sox employees were indicted on Wednesday on federal fraud charges for allegedly accepting kickbacks totaling roughly $400,000 from signing bonuses of Latin American prospects.
A federal grand jury returned a seven-count indictment, released by the U.S. Attorney's office in Chicago on Wednesday, alleging that former White Sox senior director of player personnel David Wilder and former Latin American scouts Victor Mateo and Jorge Oquendo defrauded the team of money and "honest services" by receiving kickbacks from the bonuses issued to 23 prospects between December 2004 and February 2008.
Wilder, 50, and Oquendo, 49, face seven counts of mail fraud, and Mateo, 39, is charged with three counts of mail fraud. Each count of mail fraud carries a maximum of 20 years in prison, mandatory restitution and a $250,000 fine.
The 17-page indictment claims that the trio embellished the scouting reports of several teenage Latin American prospects to boost their signing bonuses. The larger checks issued to those prospects enabled the three to pocket more money from those players, according to the indictment. (Major League Baseball rules prohibit employees from receiving any money or other compensation from players.)
Wilder and Oquendo are expected to be arraigned at later date, while an arrest warrant was issued for Mateo.
"The defendants were supposed to recruit players by paying amounts of money that matched their skills and was no greater than necessary to sign them, and they were not supposed to secretly inflate those signing amounts to provide kickbacks for themselves as the charges allege," Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, said in a statement.
Messages left for Wilder's last known attorney by SI.com on Wednesday were not immediately returned. Oquendo, of Aguadilla, Puerto Rico, hung up the phone when contacted by a reporter. Mateo, reached in the Dominican Republic on Wednesday, said he had not heard of the charges. "It was a very difficult time for me," Mateo told SI.com. "I feel innocent. I don't understand what's happening."
The White Sox case triggered a criminal investigation of several other teams and exposed systemic abuses and widespread corruption in the signing of Latin American prospects. Employees from the Boston Red Sox, New York Yankees, Los Angeles Angels and Washington Nationals have been fired in connection to bonus-skimming allegations. Fallout from the scandal spurred commissioner Bud Selig to appoint former Oakland A's GM and San Diego Padres CEO Sandy Alderson last March to overhaul MLB's practices in the Dominican Republic, baseball's largest source of foreign talent. Alderson left that post on Oct. 29 to become general manager of the Mets. Wednesday's indictment also serves as a hallmark of sorts for MLB's Department of Investigations, which had referred the case to federal authorities. The Wilder investigation was one of the fledgling unit's first assignments.
The case began in February 2008, when, according to sources, customs agents at Miami International Airport caught Wilder trying to bring nearly $30,000 of undeclared cash into the country from the Dominican Republic. Sources familiar with the investigation say that Wilder tipped off authorities that former Washington National general manager and current Fox Sports broadcaster Jim Bowden and 1990 World Series MVP Jose Rijo, who worked as a special assistant for Bowden, may have conspired to defraud the Nationals in 2006 when they signed 16-year-old Esmailyn Gonzalez to a club-record $1.4 million signing bonus. Gonzalez was found to have misrepresented his identity -- his real name was Carlos Alvarez -- and he was four years older than he had claimed. The Nationals fired Rijo on Feb. 26, 2009, nine days after the identity swap surfaced; Bowden resigned three days later. Both have denied any wrongdoing in the case.
A spokesman for the U.S. Attorney's office handling the White Sox case declined to comment to SI.com on the status of the Nationals investigation. MLB spokesman Pat Courtney also declined comment to SI.com on Wednesday.
Wilder and Oquendo met as farmhands playing for the 1982 Idaho Falls team in the Oakland A's system. After seven minor league seasons as a player, Wilder quickly ascended from an area scout and coach with the A's to stints with the Braves, Cubs and Brewers. In 2003 he joined the White Sox as director of player development. In 2005, when the White Sox won the World Series, general manager Ken Williams told SI.com that Wilder made recommendations -- such as bringing up closer Bobby Jenks -- that were key to the team's success.
Oquendo toiled more anonymously. After a playing career that he says was cut short by injury, the Puerto Rico native scoured Latin America for the Cincinnati Reds (during Bowden's tenure as general manager) and the Yankees during the mid-1990s before rejoining the Reds in 1999 and the White Sox before the 2006 season.
Mateo, 39, was a promising prospect signed by the Yankees in 1994. He and Oquendo worked on the agent side of baseball in the late 1990s, helping to sign Dominican slugger Wily Mo Pena. The pair reconnected in 2002, when Mateo joined Oquendo as a scout for the Reds, until 2005, and again as a scout for the White Sox from 2006 through '08.