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United States v. Donaghy

July 23, 2008

UNITED STATES OF AMERICA,
v.
TIMOTHY DONAGHY, DEFENDANT.
UNITED STATES OF AMERICA,
v.
JAMES BATTISTA AND THOMAS MARTINO, DEFENDANTS.



The opinion of the court was delivered by: Amon, United States District Judge

MEMORANDUM AND ORDER

I. Introduction

On August 15, 2007, in case number 07-CR-587, defendant Timothy Donaghy pled guilty to both counts of a two-count Information alleging conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349 and conspiracy to transmit wagering information in violation of 18 U.S.C. § 1084. Thereafter, in case number 08-CR-86, on April 16 and 24, 2008 respectively, Donaghy's two co-conspirators, Thomas Martino and James Battista, entered pleas of guilty. Martino pled guilty to conspiracy to commit wire fraud, and Battista pled guilty to conspiracy to transmit wagering information. As a victim of these conspiracies, the National Basketball Association ("NBA") and the United States on its behalf, seek restitution pursuant to the Mandatory Victims Restitution Act of 1996 ("MVRA"), 18 U.S.C. § 3663A. Alternatively, as to defendant Battista, restitution is sought pursuant to the Victim and Witness Protection Act of 1982 ("VWPA"), 18 U.S.C. § 3663, the MVRA's discretionary counterpart. For the reasons that follow, the Court concludes that the NBA is entitled to restitution in the total amount of $217,266.94, to be imposed jointly and severally in part and apportioned in part as set forth herein.

II. Factual Background

A. The Pleas

For thirteen years, up to and including the 2006-07 season, Donaghy was an NBA referee. During the 2003-04 season, Donaghy began to provide betting recommendations, or "picks," for NBA games, including games he officiated, to his friend, Jack Concannon. These bets were then placed by Concannon, on behalf of him and Donaghy, with a bookmaking service. Concannon, in an effort to conceal Donaghy's involvement, represented to the service that he was betting alone. The scheme between Donaghy and Concannon continued until November 2006,*fn1 during which time the two men placed bets on approximately 30 to 40 games annually.

Eventually, Concannon failed in his efforts to prevent Donaghy's gambling activity from being discovered. In December of 2006, defendants James Battista and Thomas Martino approached Donaghy and informed him that they were aware that he had been placing bets on NBA games, including games he had refereed. Battista proposed an arrangement whereby Donaghy would provide picks on NBA games to Battista through Martino. In making these picks, Donaghy was to utilize his access to certain non-public information, including the identity of officiating crews for upcoming games, the interactions between certain referees and team personnel, and the physical condition of certain players. Rather than betting his own money as he had done with Concannon, Donaghy would simply be paid a fee by Battista through Martino for a correct pick. Martino would often deliver the cash payments. Concannon was not a part of this arrangement.

After the Donaghy/Battista/Martino conspiracy came to the government's attention, Donaghy approached the government and cooperated with its investigation. Thereafter, on August 15, 2007, he pled guilty to a two-count Information. In the "Introduction" section, the Information states:

Approximately four years ago, DONAGHY began placing bets on NBA games, including games he officiated. Beginning in approximately December 2006, DONAGHY began to receive cash payments in exchange for providing betting recommendations or "picks" on NBA games, including games he officiated, to individuals involved in the business of sports betting. (Information ¶ 7.) The Information then proceeds to the two applicable Counts, alleging conspiracy to commit mail fraud and to transmit wagering information, therein describing in detail the 2006-07 conspiracy Donaghy entered into with Battista and Martino. (Information ¶¶ 8-14.) Neither Count mentions the 2003-2006 gambling arrangement between Donaghy and Concannon. The overt acts alleged in support of the two conspiracy Counts take place on December 13, 14, and 26, 2006, and March 11, 2007, and are alleged to have been in furtherance of the Donaghy/Battista/Martino conspiracy. (Information ¶ 15.) There are no acts alleged regarding the Donaghy/Concannon arrangement.

At the plea hearing, the Court asked Donaghy to describe in his own words what he did in connection with the charges in Counts One and Two. He stated:

In December, 2006, I was employed as a referee with the National Basketball Association. As an employee, I was subject to rules of conduct established by the NBA, including a prohibition on betting on professional sporting events. In addition, as a referee, I was given access to master referee schedules that included the identities of officiating crews for particular games. This information was confidential and not available to the general public. I also was aware of the manner in which officials interacted with players and called games as well as the condition of players prior to a game. By having this non-public information, I was in a unique position to predict the outcome of NBA games.

Beginning in December, 2006 until about April, 2007, I agreed with other individuals to use this non-public information in order to pick NBA teams that I predicted would win particular games and also cover the point spreads set by professional bookmakers. As part of our agreement, others would in turn use my picks in order to place bets with bookmakers on the teams I had selected. I received cash payments for successful picks but would not lose any money if a pick did not win and cover the point spread. Some of my picks included games I had been assigned to referee. (Donaghy Plea Tr. at 21.) Donaghy did not refer to the betting arrangement he had made with Concannon. A subsequent discussion ensued regarding the scope of the conspiracies to which Donaghy had just pled guilty:

[THE GOVERNMENT]: If I could make one point of clarity, it is alleged in the information in addition to the two crimes that the defendant has now pled guilty to, that he did himself place bets on NBA games. I didn't want there to be confusion. I think he would acknowledge that. That was not part of the charge. It was not part of the charged conduct and the conspiracy in Count Two. It is conduct in which he engaged.

THE COURT: Is there any dispute about that?

[DEFENSE COUNSEL]: Your Honor, I'm not sure of the relevance at this point in terms of the allocution, but there is not a factual dispute as to what was said.

THE COURT: Let me ask, does the government believe that I need to make any further inquiry to establish a factual basis for the plea to either Count One or Count Two?

[THE GOVERNMENT]: We do not, your Honor.

[DEFENSE COUNSEL]: Your Honor, let me clarify one thing that Mr. Seigel said. There is nothing in this information that suggests Mr. Donaghy personally placed any bets. The allegations relate to conspiracy charges which I think have been allocuted. I don't want there to be any misunderstanding on the record in terms of what he's pleading to or the conduct he's pleading to.

THE COURT: The heart of the allegation, as I understand it, with respect to Count One, is that he was providing recommendations and information for the purposes of others who were engaged in sports betting.

[DEFENSE COUNSEL]: That more accurately describes.

THE COURT: That's what's charged, correct?

[THE GOVERNMENT]: Right. I want to say because there's an allegation in here that Mr. Donaghy doesn't dispute, that he has been betting on NBA games himself for three years.

THE COURT: Where?

[THE GOVERNMENT]: Paragraph 7. I wanted to make clear while he was independently betting on games, the conspiracy charge in which he was paid for his picks is Count One and the related conspiracy Count Two. That's separate from the other conduct which is alleged but not part of the essential elements of the two counts. (Donaghy Plea Tr. at 25-26 (emphasis added).)

The following April, Martino and Battista pled guilty. On April 16, 2008, Martino pled guilty to participating in the same wire fraud conspiracy that Donaghy had been involved in. He described his crime as follows:

Between mid-December 2006 and early April 2007, I agreed with James Battista and Tim Donaghy to pay Tim Donaghy, an NBA referee, for non-public information to which he had unique access by virtue of his position as an NBA referee about games that he was scheduled to referee. Mr. Donaghy would provide me with the name of the team he believed was a good pick for gambling purposes. I knew that Mr. Donaghy was violating the rules that governed his NBA employment by providing this information. That information was relied on by Mr. Battista to place gambling wagers on NBA teams. If Donaghy's pick won he was paid for his information. He was not paid if his pick lost. On most occasions I would receive that information from Mr. Donaghy by telephone and then relay that information to Mr. Battista by telephone. On December 13, 2006, I spoke with Mr. Donaghy by telephone regarding his pick for an NBA game. On December 14th, Mr. Donaghy and I met in Pennsylvania where I gave him a cash payment for his information. On December 26th, I spoke with Mr. Donaghy by telephone and again received his pick on an NBA game. On March 11, 2007, I met with Mr. Donaghy in Toronto, Canada and gave him a cash payment. During the investigation of this case I testified that I did not relay information I received from Mr. Donaghy to Mr. Battista and that was not truthful. (Martino Plea Tr. at 23-24.)

On April 24, 2008, Battista pled guilty to conspiracy to transmit wagering information, the same conspiracy to transmit wagering information that Donaghy had pled guilty to. He described his crime as follows:

I, James Battista, of sound mind and will from December of 2006 to March 2007, I was engaged in the business of sports betting, and I agreed with Tom Martino and Tim Dona[ghy] to use the telephone across state lines to obtain information to assist me in wagering on sporting events, on NBA basketball games. I received information from Tom Martino, who received his information from the NBA referee Tim Dona[ghy]. This agreement was formed during a meeting between the three of us, in a hotel in December of 2006. During the Course of this agreement from time to time I directed Mr. Martino to do certain things such as having meetings with Mr. Dona[ghy].

THE COURT: Overt Act B says, that on December 14, 2006, that you and Battista met with the NBA referee, who is Mr. Dona[ghy], is that correct?

THE DEFENDANT: Yes.

THE COURT: You met in Pennsylvania and gave him cash?

THE DEFENDANT: Yes, your Honor, I did.

THE COURT: You did that?

THE DEFENDANT: Yes, I did, your honor.

THE COURT: Now, you used the telephone. Did you also use the telephone for the purpose of transmitting bets and wagers and information involving bets and wagers?

THE DEFENDANT: Yes, your Honor, I did.

THE COURT: Did you use it interstate, did you call from state to state?

THE DEFENDANT: Yes, your Honor, I did. (Battista Plea Tr. at 19-20.)

The overt acts contained in the indictment for the wagering conspiracy make clear that, although criminalized by two separate provisions of the United States Code, the same underlying conduct was at issue:

In furtherance of this conspiracy and in order to accomplish the objectives thereof, the defendants JAMES BATTISTA and THOMAS MARTINO, together with others, committed and caused to be committed, among others, the following overt acts:

a. On or about December 13, 2006, MARTINO spoke with the NBA referee by telephone regarding the NBA ...


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