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SAN DIEGO A federal investigation into extortion claims by New Orleans Saints running back Reggie Bush and his family has revealed the existence of taped conversations that could confirm Bush took cash and gifts while he was playing football for the University of Southern California.
Lloyd Lake, an investor in a failed sports marketing agency which attempted to launch with Bush as its first client, is the subject of a grand jury probe into the extortion claims. The agency called New Era Sports & Entertainment was founded by Lake and San Diego businessman Michael Michaels. Lake told Yahoo! Sports in August 2006 that he contributed a portion of the cash and gifts allegedly given to Bush and his family as part of an agreement to represent the then-USC running back when he signed an NFL contract.
According to multiple sources in an ongoing Yahoo! Sports investigation, nearly $280,000 in cash, rent and gifts was allegedly given to Bush and his family. Lake and Michaels both said in August 2006 that they planned to file a lawsuit against Bush.
The U.S. District Attorney's office in San Diego has issued grand jury subpoenas to multiple witnesses in the probe since October, requiring them to appear before federal investigators. According to a copy of a subpoena obtained by Yahoo! Sports, at least one of the witnesses was asked to produce "any recordings in your possession of conversations between Lloyd Lake and Reggie Bush, Denise Griffin, or LaMar Griffin." Denise Griffin is Bush's mother. LaMar Griffin is Bush's stepfather.
If such taped conversations involving Bush become public, Bush and USC could face penalties from the NCAA and Pacific-10 Conference, which are conducting ongoing investigations into reports of extra benefits.
If the NCAA rules that Bush received extra benefits during his playing career at USC, he could be ruled retroactively ineligible. Since some of the benefits date to the 2004 season, the Trojans' national championship that season could be rescinded. USC could face further NCAA sanctions and Bush's 2005 Heisman Trophy could be in jeopardy. The Heisman ballot indicates that an athlete must meet NCAA eligibility requirements to be considered for college football's most prestigious award.
"I respectfully decline to comment on the media frenzy regarding Reggie Bush, his family and his college career," David Cornwell, Bush's attorney, said Wednesday.
The NCAA declined to comment on its investigation, except to ask that anyone with information regarding the allegations against Bush and his family come forward. The NCAA has interviewed numerous sources in the matter, including USC coaches and officials and business associates directly and indirectly involved with Bush.
Yahoo! Sports has learned that LaMar Griffin spoke with federal investigators in the spring of 2006 and acknowledged the existence of the tapes. In an appearance before a grand jury on Jan. 12, 2007, Lake's mother Barbara Gunner testified that she had heard portions of tapes made by her son, in which LaMar Griffin states that Bush intended to repay New Era Sports financiers "their money," as well as for a car that was purchased for the former USC running back.
Multiple sources told Yahoo! Sports that Lake made the tapes in late 2005 to protect his financial investment if Bush backed out of their alleged agreement. New Era's goal of landing Bush as a client officially failed when Bush signed to be represented by agent Joel Segal and marketing agent Mike Ornstein in January of 2006.
Lake and Michaels told Yahoo! Sports in April 2006 that Bush and his family agreed to be partners in New Era Sports in 2004, then backed out of the venture after accepting the finances Lake and Michaels provided as part of the deal. The bulk of the benefits Lake and Michaels claim they gave to Bush and his family including direct cash payments, rent-free living in a new home, paying off credit card debt and money for a car for Bush were allegedly provided over a one-year period starting in late 2004.
In April 2006, Yahoo! Sports first revealed allegations that Bush and his family received extra benefits, including $54,000 in rent-free living at Michaels' $757,500 home in Spring Valley, Calif., according to Michaels and San Diego attorney Brian Watkins.
Yahoo! Sports also reported the Bush family received $28,000 from New Era financiers to settle pre-existing debt, according to Michaels and Watkins. Yahoo! Sports also reported that Bush received approximately $18,000 to purchase and upgrade a car while he was still a student at USC.
On Sept. 14, 2006, Yahoo! Sports published findings of an ongoing investigation that revealed that Bush and his family appeared to have accepted benefits worth more than $100,000 from two groups of marketing agents. The report came after Yahoo! Sports reviewed multiple travel records, documents and receipts. In addition to Lake and Michaels, extra benefits appear to have been supplied by Ornstein, Bush's current marketing agent.
NCAA by-law 220.127.116.11 states that an athlete shall be deemed ineligible if he or she accepts benefits from agents or marketing representatives. The rule further states that student-athletes, their family or friends cannot receive benefits or loans from agents. Additionally, NCAA by-law 18.104.22.168.6 states that athletes cannot receive preferential treatment, benefits or services because of the individual's athletics reputation or skill or pay-back potential as a professional athlete, unless such treatment, benefits or services are specifically permitted under NCAA legislation.
Cornwell responded to the initial reports in April by claiming that Bush and his family were victims of an extortion plot. Cornwell eventually spoke with federal authorities about the matter, claiming that Lake and Michaels tried to coerce Bush into paying the money. Griffin then told a federal investigator that Lake threatened to make the tapes public if the money was not repaid.
Gunner and Lake's former girlfriend, Maiesha Jones, have both testified before the grand jury. Lake's sister, Lisa Lake, voluntarily spoke with federal investigators. Gunner explained to the grand jury that she provided at least $60,000 to her son to help finance the business. According to a source close to the case, Jones told the grand jury about the business relationship between Lloyd Lake, Michaels and Bush.
The extortion probe has produced no formal charges. Lloyd Lake was recently released from a one-year prison term for a parole violation in conjunction with a previous drug-related conviction. If brought up on extortion charges, he could face a maximum two-year sentence. He also faces a domestic violence charge in California from an incident with Jones.
Bush just completed his rookie NFL season, helping the Saints reach the NFC championship game for the first time in team history. Bush had 565 yards rushing on 155 carries this season and had 88 receptions for 742 yards after being the No. 2 overall pick in the 2006 draft. He scored nine touchdowns in the regular season.
Bush has said that he and his family did nothing wrong in regard to the allegations of receiving extra benefits. Bush has not talked to federal investigators in the extortion probe. He also has not cooperated with the investigation by the NCAA, which does not have subpoena power.
According to a report first published by Foxsports.com, Bush requested a sideline pass from his alma mater for the 2007 Rose Bowl but USC declined, stating that it had already distributed its allotment of VIP passes.
USC coach Pete Carroll was questioned about Bush's absence from the Rose Bowl on a Los Angeles radio program on Jan. 2, the morning after the game. Radio host and Los Angeles Times columnist T.J. Simers asked Carroll: "You saw the reports that Reggie was told not to come to the Rose Bowl, to stay away from USC. Do you buy that? Do you have anything to do with that?"
Responded Carroll: "No. I know that through this investigation, because he's not cooperating the way they'd like it, there's some issues about that. Reggie gets to do whatever he wants to do. He's not part of us anymore and we can't control any of that. But there's some, I think some opinions from the NCAA that they're mad at Reggie. And, you know, they would not like him to be associated with us. But I don't know what's going on with all that. But there is some stuff.
"I did call Reggie and he didn't hear from anybody about any of that kind of stuff. We're just going to keep working along the best we can and try to keep our head above water and do the right thing and stay out of that stuff. But that stuff, it is kind of nasty. You just don't know where it's coming from and people are out to get you. It can get kind of hard."