MLB scouts scandal: a little off the Dominican signing bonus top

LA CALETA, Dominican Republic -- Kelvin De Leon, 17 years old and a millionaire for a day, rumbles over a dirt road in his silver Japanese SUV and stops in front of his grandmother's house.

He doesn't live around here anymore. Before it was torn down, the small house where he grew up -- a cinder-block-and-concrete box with a corrugated metal roof just down another dirt road -- was like the others in this town. Last year, he moved with his parents to Santo Domingo, the capital, about 30 minutes away. The family's new home was made possible by the $1.1 million signing bonus the New York Yankees paid De Leon to wear pinstripes.

He signed a contract July 2, 2007, and everything about his life changed.

"Imagine," De Leon says in Spanish. "I had reached another level; I was going to be a professional. I was about to play."

Two years after he quit school to train with a buscon (Spanish for a "finder" and a kind of street agent), De Leon was sent to the Yankees' Dominican academy not far from where he grew up. But before he left, he had one more transaction to complete -- $100,000 of his signing bonus had to be delivered to two men: Carlos Rios, the Yankees' director of Latin American scouting, and Ramon Valdivia, the team's Dominican scouting director.

It seemed perfectly normal, De Leon says. What mattered was that he signed the paper and was on his way. He was grateful to the Yankees' scouts.

"Everyone that was involved, or the people that I always worked with," were supposed to get some money, he says. "That's normal here in the Dominican Republic."

He also gave a chunk to the buscon who worked with him and another chunk to the agent he hired after the buscon said he should fire his American agent. De Leon says he isn't sure how much of his signing bonus those two received.

Then in June of this year, Major League Baseball employees spoke to De Leon and his teammates at their Dominican camp and warned them that some major league scouts had been demanding payments from players. It was wrong, they said.

De Leon says they were describing exactly what had happened to him.

"I was surprised. I said, 'How did this happen?'" De Leon says. "I was very sad because I felt like they used me."

He says he spoke to MLB and Yankees officials and told them about the $100,000 payment to Rios and Valdivia.

By then, MLB investigators already were looking into the two men, as well as a number of other MLB scouts in the United States, the Dominican Republic and Venezuela.

The game was faced with a new twist to the corruption that had taken place for years in the Dominican. Major league employees were stealing money, and they were stealing it from their own clubs.

A three-month "Outside the Lines" investigation reveals that the scandal began to unfold in February as pitchers and catchers were starting a new season. A White Sox prospect in the Dominican informed the club that a team employee had asked for part of his signing bonus, and the complaint was passed up to MLB offices in New York.

Two weeks later, David Wilder, the senior director of player personnel for the White Sox, was making his way through customs at Miami International Airport when he was stopped. He was carrying about $40,000 in undeclared cash back from the Dominican. And a tale began to unravel that has shaken baseball from its Park Avenue offices in Manhattan to the muddy back roads of this small Caribbean nation.

MLB launched a probe, and so, too, did the Federal Bureau of Investigation. High-level scouts from the White Sox, Yankees and Red Sox have been fired; more teams are expected to be implicated, and more dismissals are anticipated. The FBI probe has stretched beyond the White Sox to include inquiries into the actions of Washington Nationals general manager Jim Bowden and special assistant Jose Rijo. Neither has been charged, and both have denied any wrongdoing.

The revelations underscore the Dominican baseball scene's reputation as a lawless Wild West landscape with little oversight. For years, hands have been reaching out in every direction for just a taste of wealth in a country mired in 15 percent unemployment and more than 40 percent poverty.

To help their children break free and chase the American baseball dream, some parents give their older sons the birth certificates of their younger sons. Or they turn their boys over to a buscon who might be able to provide a birth certificate that takes a few years off a prospect's life. After all, if two players have the same abilities but one is 18 years old and the other is 16, isn't a major league team more likely to sign the 16-year-old? And sometimes it works in reverse: There are the players who make themselves older so they can sign contracts before they reach the legal age of 16.

Some buscons try to make their players bigger and stronger by giving them steroids designed for cows and horses. Others tell prospects they can earn a quick $5,000 by marrying a young woman and helping her secure a visa to the United States. At least 15 Dominican players have been permanently banned from the United States because of their involvement in the marriage scheme.

"It's been going on forever," says Porfirio Vera, the national commissioner of baseball in the Dominican Republic, "because it's a business and the potential benefits are there. There's money to be made, and people always look for the easiest way to make it. As long as players are being signed, and there are kids who lack the right preparation or the right understanding … and besides, they need the money."

These recent scams vary in execution, but the basic plan is the same: A major league scout inflates the value of a player, a team signs him, and the scout then receives a little off the top of the bonus in cash from the player. Players, agents, scouts and coaches in the Dominican say they've known it's been happening for years, always suspecting that someone in the United States was getting the money. But until the system began to unravel in late February, nothing was done about it.

Eduardo Olivares, a self-described buscon, says Dominican baseball always has had unscrupulous buscons and scouts who demand bribes to get a player signed. But until the last decade, signing bonuses given to even the top prospects rarely rose above $10,000, so there wasn't much to skim. The wholesale fraud -- inflating scouting reports to get more money out of the clubs -- developed when the size of the bonuses started to swell.

In 2004, according to statistics provided by Major League Baseball, the average bonus to a Dominican player was $29,272. As of last week, the average bonus this year was $108,130. In July, the Oakland A's signed 16-year-old pitcher Michael Inoa to a contract with a $4.25 million signing bonus.

"Let's just say," Olivares says in Spanish, "that dance has been going on for the past seven years."

Major League Baseball insists that until the revelations of the past few months, it had no idea corruption in the Dominican had risen to this level.

"It now appears in hindsight that everyone else in the process was aware of this happening, and the clubs and we were not aware of it happening," says Bob DuPuy, Major League Baseball's president and chief operating officer, during an interview at MLB headquarters. "We were aware of issues with regard to the buscons. … We were aware of the occasional fraud with regard to age or identity. We were not aware of financial improprieties."

Buried in Sen. George Mitchell's famous 409-page report on doping in baseball is a recommendation on page 287 that received little attention. "The Commissioner Should Establish a Department of Investigations," Mitchell wrote.

MLB seized on the idea and formed a unit in January. In February, after receiving the tip about the White Sox, the department began to dig into allegations that team employees were stealing money. Four Spanish-speaking investigators with law enforcement backgrounds were sent to Latin America -- a fifth was added later -- to interview scouts, buscons, players and their families in the Dominican Republic and Venezuela.

"It's like where every time you pick up a rock and all the bugs come out," says an MLB official with knowledge of the investigation. "Every time we're down there, we find something."

The first instance of skimming uncovered by both MLB and the FBI involved the Wilder allegations. Wilder spent seven middling seasons as a player in the minor leagues, never reaching the majors, before he left the field for management and player development roles. He worked with four teams before he joined the White Sox in 2003, and he was credited with playing a significant role in the team's 2005 World Series title run. Once considered a rising star in baseball's executive ranks, Wilder interviewed for several general manager openings, including the Red Sox in 2005. He remained with the White Sox, though, as one of GM Ken Williams' closest confidantes.

"Nobody saw this coming," one White Sox source says. "Not in a million years. Kenny was crushed."

Other White Sox officials declined comment, citing the FBI's ongoing investigation.

According to MLB sources and a former White Sox scout, Wilder's role in financial improprieties involving the signing of Dominican players wasn't just a recent development.

"It was certainly happening for a while," says the MLB official with knowledge of the skimming probe. "With Wilder, it appears this has been going on for several years, and he has made hundreds of thousands of dollars, if not more."

Former White Sox scout Victor Mateo, who was fired for his part in the scheme, tells "Outside the Lines" that Wilder directed him to overstate the talent of certain players, thus boosting their value and potential signing bonuses. That extra money, then, could go back to Wilder and Mateo.

One case involved Rafi Reyes, a 17-year-old outfielder whom Mateo latched onto early. In Reyes' case, Mateo strayed from his role as a team scout and became Reyes' buscon.

"I fed him. I trained him. So I came from work; it didn't matter if I was coming in from the interior of the country and in the afternoon," Mateo says, in Spanish. "I had to go to a park to work with this kid. So I would take up time that could have been used to spend with my family alongside with this kid. He became so close to my family that he began to say that my daughters were like his sisters."

Reminded that such care is more typical of a buscon than a team employee, Mateo acknowledges he knew it was wrong. But he says, "I also thought that I could also get something out of this."

However, it was Wilder, Mateo says, who got $45,000 out of the deal. In 2007, Reyes -- aided by an uncle, Victor Reyes, a friend of Mateo's who also acted as Rafi's buscon -- signed with the White Sox for $525,000. Mateo says he received a $50,000 cash "gift" from Victor Reyes after Rafi signed, but gave most of it to Wilder, in part because he hoped to get a promotion.

Mateo says he never asked for the money. Victor Reyes also describes the money as a gift, although he says he knew Mateo could get in trouble if the gift was discovered. In the end, Mateo says he kept only $5,000 from the deal and lost his job, along with any chance of working for a major league club again.

"I gave [the money] to him because, look, we're in a country of few opportunities, be it of work or things like that," Mateo says. "Dave Wilder is the person who gave me the opportunity of getting this job that allows me to support my family. I was under pressure because he was asking me for money. I preferred giving David my money, instead of him going directly to kids and asking for it."

After MLB reported its findings to the White Sox, Wilder, Mateo and another White Sox scout, Domingo Toribio, were fired May 16. The team said little about the reasons, only that the men were dismissed "for actions in Latin America that were violations of club policy and standards."

White Sox GM Williams, speaking before the team's game in San Francisco that night, told reporters "Sometimes you have to laugh to keep from crying."

Sources say Wilder, who has not been charged with a crime, has been cooperating with the FBI's investigation. He did not respond to numerous interview requests from "Outside the Lines."

The White Sox skimming case was only the beginning for MLB's investigators. On repeated and extended trips to the Dominican, the unit received several tips about a number of different teams. The Yankees quickly became a focal point.

In June, with investigators already following leads regarding the Yankees, the club received an anonymous letter from the Dominican Republic. It was essentially a tip sheet, listing the names of about a half-dozen prospects along with their signing bonuses and money that allegedly had been skimmed by team employees.

De Leon's name was on the list, but De Leon says he had no knowledge of the letter and has no idea who might have sent it.

By mid-August, MLB investigators felt they had nailed down the case involving De Leon, and the Yankees fired Rios and Valdivia, the two scouting directors. Around the same time, the Red Sox quietly fired their Dominican scouting supervisor, Pablo Lantigua. None of the dismissed scouts could be reached for comment.

One MLB source with knowledge of the probe says he expects as many as six teams and 20 employees to be implicated in the end. But another MLB official says those numbers might be low, reiterating that "the more time you spend down there, the more you uncover."

That official also says the probe won't have the same kind of closure the Mitchell report provided. Rather, baseball will make ongoing efforts to tamp down the problem. Four of MLB's investigators were back in the Dominican last week, signaling the probe is ongoing.

"We're probably not going to stop it, but we can put a dent in it, impact it in a big way," says the official. "But there is so much money to be made. I have no confidence that even if I said we were finished, we wouldn't be back in a year or two. People are creative."

To Arturo Marcano and David Fidler, it all sounds familiar. Marcano, a lawyer from Venezuela now living in Toronto, and Fidler, a law professor at Indiana University, have spent the past decade teamed up in an effort to expose the exploitation of young ballplayers in Latin America.

Their 2003 book, "Stealing Lives: The Globalization of Baseball and the Tragic Story of Alexis Quiroz," charges that MLB fostered a system that takes advantage of young, cheap and often desperate talent and pays little attention to human rights and labor standards.

Like some scouts and buscons in the Dominican, Marcano says it has been well known for years that some team employees were skimming -- though perhaps no one knew it had reached all the way to the States, and to high-ranking executives such as Wilder. Marcano says history suggests whatever oversight MLB is employing now isn't likely to last.

"What is going to happen is that you get these cases that become public; there's some bad press, then some type of reaction from Major League Baseball. Then in three months, everything is forgotten," Marcano says. "I think they are reacting because they are losing money. Like in the past, you had the scout basically stealing the money from the signing bonus. In this case, also you have these high-ranking officials stealing money from the player, but then they are [also] stealing money from the team directly."

DuPuy says there was no reason for MLB to ignore the situation. MLB has had an office in the Dominican since 2000, and DuPuy says commissioner Bud Selig has aggressively worked to eliminate issues such as age and identification fraud, visa improprieties and performance-enhancing drug use there.

"In a developing area such as the Dominican, where there is so much poverty and where this is the ticket obviously to go from, in many instances, abject poverty to enormous wealth, you're going to have systemic challenges," DuPuy says. "We're not going to turn a blind eye to those, and we're not going to ignore them. We're going to do everything we can to ferret them out and to make sure that the players are treated fairly, and to make sure the clubs are treated fairly, and to make sure the other people who are involved in the system are treated fairly."

On one thing, Marcano and DuPuy agree: The solution to some of the financial improprieties in Latin America is a worldwide draft covering players in the Dominican and Venezuela. Right now, the free-agent system with player salaries exploding and team scouts making nominal salaries is a "recipe for disaster," says Marcano.

A draft, though, would limit the power yielded by buscons and scouts, in much the way the American amateur draft sets the market for players. DuPuy says ownership previously was against the idea of a worldwide draft, but has shifted its position over the past five years.

"There's almost total unanimity from the clubs' standpoint that a worldwide draft would be a good thing," he says, acknowledging owners haven't always agreed on the issue.

A worldwide draft would need to be negotiated into the Basic Agreement between owners and players. The union's general counsel, Michael Weiner, says the players are open to considering an international draft "if it's important to management."

In the case of Kelvin De Leon, not everyone is convinced he is an unwitting victim.

One major league source familiar with MLB's probe says De Leon told investigators his family met with Rios and Valdivia and reached an understanding: Kelvin would sign with the Yankees and give the men $100,000 if they could get him $1.1 million.

"He knew exactly what they were doing," the source says.

Yankee officials declined to comment, but one team source, speaking on the condition of anonymity, says the team believes De Leon made a conscious decision to give his money to someone. For that reason, they don't plan to give him another $100,000, even if he and his family now regret that decision.

One MLB official says the commissioner's office still considers De Leon a victim. Even if he was complicit in the scam, the source says, it isn't as if a 16-year-old from a poor family can realistically be expected to resist the system and speak up at the risk of losing a $1.1 million contract.

"It has been part of the culture there," says the official. "These kids just want to get signed, want to get with the club. They're trusting. He's a victim. These are poor, uneducated kids from families with no money. If they are told by scouts and the buscons this is how it works, then they do it.

"It's not as if you have some parent from Orange County paying off an American scout, saying, 'Here's $20,000; sign my son.' It's nothing like that."

De Leon says he was told that the Yankees and MLB are still looking into his case, and he hopes his $100,000 will be returned. The investigation hasn't affected his place in the Yankees' organization. During this year's Dominican Summer League, he hit .289 and led his team with nine home runs and 43 RBI. He also led the team in both walks and strikeouts. Next year, De Leon could play for the Yankees' Class A affiliate in Staten Island.

Wherever he ends up, though, he says he carries one lesson with him:

"You have to take care of yourself."

ESPN producers Enrique Garduza and Nicole Noren, and Alberto Pozo contributed to this report. T.J. Quinn and Mark Fainaru-Wada are reporters for ESPN's Enterprise Unit. Quinn can be reached at tjquinn31@yahoo.com. Fainaru-Wada can be reached at markfwespn@gmail.com.