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UNITED STATES v. WALTERS

October 11, 1991

UNITED STATES OF AMERICA, Plaintiff,
v.
NORBY WALTERS, Defendant



The opinion of the court was delivered by: LEINENWEBER

 HARRY D. LEINENWEBER, UNITED STATES DISTRICT JUDGE

 Defendant, Norby Walters ("Walters"), was charged in a seven-count indictment with Racketeering, Racketeering Conspiracy, Mail Fraud, and Conspiracy. On April 13, 1989, in a trial before Judge Marovich of this court, a jury convicted Walters and co-defendant, Lloyd Bloom ("Bloom"), on six counts, including two counts of mail fraud. On September 17, 1990, the Seventh Circuit Court of Appeals reversed all the convictions and remanded the case for a new trial on the ground that it had been an error to refuse to instruct the jury on the advice defendants received from counsel. Bloom subsequently requested assignment to Judge Marovich pursuant to General Rule 44(a). The case was therefore bifurcated for trial, and Walters is before this court on remand.

 Defendant now moves to dismiss the indictment, arguing that the evidence presented by the government during his first trial ("Walters I") is insufficient to support a guilty verdict on the mail fraud counts. *fn1" Defendant's motion raises several questions concerning the scope of the federal mail fraud statute, 18 U.S.C. ┬ž 1341. After careful examination, the court denies defendant's motion to dismiss the indictment.

 Facts and Procedural History.

 According to the indictment, Walters and Bloom, operating as World Sports and Entertainment, Inc. ("WSE"), approached a number of college football players and persuaded them to sign representation agreements ("agreements"). Walters and Bloom presented themselves as experienced agents who could assist the athletes in post-collegiate contract negotiations with National Football League franchise organizations. According to the indictment, Walters and Bloom offered each player a "signing bonus," which was increased if an athlete appeared reluctant to sign. Inducements offered by Walters and Bloom included: "large amounts of cash; monthly wire transfers of funds; interest-free loans; automobiles; clothing; concert and airline tickets; trips to New York City; hotel accommodations; use of limousines; trips to major entertainment events; introduction to prominent entertainers; cash payments and other benefits for family members; and insurance policies." Superseding Indictment Count I, para. 14.

 A major source of some players' reluctance was the fact that the National Collegiate Athletic Association ("NCAA"), the Mid-American Athletic Conference and the InterCollegiate Big Ten Conference ("Big Ten") (collectively referred to as the "Associations") had regulations which strictly governed the amateur status of athletes who played for member colleges. Essentially, these regulations provided that a student-athlete was ineligible to participate in intercollegiate athletics if that athlete:

 
(1) contracted with an agent to be represented in the marketing of the athlete's athletic ability or reputation;
 
(2) agreed to receive financial compensation for participation in intercollegiate athletics when the compensation was to be received following the completion of the athlete's intercollegiate career; or
 
(3) received financial assistance from a source other than the school-administered program, excluding support received from the athlete's family or aid awarded without regard to the athlete's athletic ability.

 NCAA rules and regulations provided for a limit on the number of athletic scholarships which a school could offer each year in any particular sport. In Division I-A football, each school was permitted to award up to 30 athletic scholarships per year. The rules further provided that a college could have no more than 95 scholarships in effect each year in any particular sport.

 In order to implement these regulations, the Associations required the athletes to submit eligibility statements ("statements") to the colleges certifying that they had complied with the regulations. The statements were then forwarded to the Associations. The regulations provided that any athlete who knowingly submitted false or misleading information to his college regarding his compliance with the regulations was ineligible to compete in intercollegiate athletics or to receive an athletic scholarship.

 In order to persuade the players to sign, Walters and Bloom allegedly devised a scheme to prevent the disclosure of the agreements. First, Bloom and Walters told each player that WSE's copy of the agreement would be kept hidden in an office safe. Second, in the event that the agreement was discovered, it was post-dated until after the player's eligibility had expired.

 DISCUSSION

 Where a defendant moves to dismiss an indictment, the court is "not concerned with the truth or falsity of any factual allegation . . . instead the issue is whether the facts as alleged constitute violations of the relevant statute." U.S. v. Lytle, 677 F. Supp. 1370, 1374 n. 8 (N.D. Ill. 1988); See also U.S. v. Sampson, 371 U.S. 75, 78-79, 83 S. Ct. 173, 174-75, 9 L. Ed. 2d 136 (1962).

 Defendant Walters moves the court to dismiss the indictment on three grounds: first, the government has failed to allege a violation of the mail fraud statute; second, the evidence is insufficient to prove that defendant knew about the false representations made by the athletes to the colleges; and third, the mails were not used "in furtherance ...


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