Mary Jo White's report provides blueprint for potential criminal prosecution of Daniel Snyder

For Daniel Snyder, there's a chance the end of his tenure as owner of the Commanders could be the beginning of an entirely different adventure.

The long-awaited report from Mary Jo White, released moments after the NFL announced the approval of the sale of Commanders, ostensibly closes his business with the NFL. But the $60 million fine imposed by the league — less than one percent of the $6.05 billion sale price of the team — possibly won't be the end of Snyder's legal complications.

The White report contains a potential blueprint for state or federal prosecution of Snyder.

White found that the team did indeed manipulate the financial records to minimize the obligation to share revenue with the other 31 teams, as required by the NFL's Constitution and Bylaws. The 22-page written report contains numerous blunt and candid references to this conclusion.

From page 12: "Documentary evidence, witness interviews, and Club admissions all corroborated Mr. [Jason] Friedman’s allegations that the Club intentionally shielded and withheld shareable NFL revenues."

Also from page 12: "It is clear . . . that the Club intentionally underreported some amount of shareable revenue and did so in deliberate violation of the League’s revenue sharing rules, frequently by improperly classifying NFL revenues as non-shareable revenues from special events, such as concerts, college football games, or soccer games."

From page 13: "Although Mr. Snyder denied it, multiple witnesses informed us that Mr. Snyder pressured employees to improve the Club’s financial performance ('every last dollar' matters) and the evidence shows that, as one way of achieving higher revenues and lower costs, the Club, during the 2009–2015 seasons, wrongfully violated the sharing rules in order to retain greater amounts of shareable revenues through 'VTS savings.'"

Also from page 13: "As Mr. Friedman described it, the Club 'always [had] this goal to create as much non-shareable revenue as possible,' but they 'start[ed] cheating to do it.'"

Likewise from page 13: "Knowledgeable former employees from sales, ticketing operations, and finance agreed to be interviewed and acknowledged to the Investigators that Club personnel knew at the time that certain of the Club’s various methods of [Visiting Team Share] 'shielding' — including falsely classifying revenues as something they were not and reporting falsely lowered ticket prices to the NFL— would be wrong and violated the League’s rules."

From page 14: "[I]n one 2010 email that the Club produced, a former employee, after agreeing to allocate NFL shareable revenue instead to a college football game, jokingly emailed the CFO: '[i]f the NFL had a jail... we would be in it.'"

Also from page 14: "Another former employee, who specifically commented on the absence of support for the transfers of revenues from NFL accounts into special event accounts, told us of their contemporaneous discomfort with the Club’s recording and reporting of NFL revenues, commenting that the overall culture was to 'maximize revenue, break the rules if you need to,' and 'do as much as you can, but don’t get caught.'"

Again from page 14: "Emails also corroborated what Mr. Friedman described as a 'a second set of books,' in which Club employees prepared financial records that compared NFL ticket sale revenues reported to the League to actual revenues from NFL ticket sales."

And this from page 14: "[T]he Club has now acknowledged, as alleged by Mr. Friedman, that employees reclassified NFL revenues to non-shareable accounts, causing the Club to apparently underreport NFL revenues for sharing."

From page 15: "From 2009 until early 2016, for example, employees’ emails frequently discussed 'pushing,' 'selling on,' 'allocating,' or 'mov[ing]' revenue in ways to 'shield' or 'save' VTS and 'maximize [the] bottom line.'"

From page 18: "Other evidence discovered during the Investigation supports the finding that the Commanders intentionally misclassified or reclassified some potentially significant amount of season ticket and other shareable revenue to evade their NFL sharing obligations."

Also from page 18: "For instance, a knowledgeable former employee informed us there was 'always a push' to reclassify NFL revenue as special events revenue without any meaningful backup. Employees knew this was not right, we were told, but senior executives seemed to excuse the Club’s deliberately underreported revenue to the League because 'it’s the NFL' and not the government."

From page 19: "Accordingly, drawing all reasonable inferences from the evidence available to us and the Club’s failure to provide credible explanations or basic supporting detail for the vast majority of financial entries on these items, we find that approximately $11 million in NFL revenues appears to have been improperly shielded and some significant portion of the approximately $44 million of Deferred Income Transfers may also represent shareable revenue received by the Club during the 2009–2015 seasons that was improperly shielded from sharing to the extent required by League policies."

Likewise from page 19: "We also find that Mr. Snyder, known for his hands-on management and close monitoring of the Club’s finances, was aware of and supportive of the Club’s efforts to minimize its revenue sharing obligations. . . . Mr. Snyder, at a minimum, set a tone at the top that led to and encouraged the Club’s various schemes to shield NFL revenues from sharing. He acknowledged in his interview that he, as CEO and owner, would be responsible for any misconduct by the Club."

Thus, Snyder's responsibility does not necessarily end with a $60 million fine. The laws of Maryland (where the stadium is located), Virginia (where team headquarters are located), and the U.S. government potentially encompass this protracted scheme by the Commanders to defraud the NFL and its member teams.

For example, Section 8-401 of the Maryland Code, titled "fraudulent conversion of partnership assets" provides that a "partner may not with fraudulent intent: (1) convert or appropriate to the partner's own use partnership money or property (2) make, or cause to be made, a false entry in partnership records of a partnership transaction; or (3) fail to make or cause to be made an entry in partnership records to show the true state of a transaction: (i) relating to partnership business; or (ii) involving the use of partnership money or property."

Section 8-402 of the Maryland Code, titled "fraudulent misrepresentation by corporate officer or agent," provides that, "[w]ith intent to defraud, an officer or agent of a corporation may not sign, or in any manner assent to, a statement to or a publication for the public or the shareholders that contains false representations of the corporation's assets, liabilities, or affairs, to: (1) enhance or depress the market value of the corporation's shares or obligations; or (2) commit fraud in another manner." (Emphasis added.)

Virginia law includes a lengthy list of specific prohibitions on fraudulent behavior, or various forms and types. Federal law becomes particularly relevant if/when fraud is perpetrated by the U.S. mail, or by wire (which includes phone, fax, text, and/or email).

Although senior executives excused the conduct "because 'it's the NFL' and not the government," the government has created specific criminal laws aimed at discouraging such behavior, under threat of significant criminal penalties.

The White investigation found a smoking gun regarding actual fraud in the misclassification of revenue, despite also concluding that the team had failed to fully cooperate with the investigation. As explained at page 22 of the White report, "At every turn, the Club and Mr. Snyder have complained about the burden and cost of searching for and producing materials responsive to our requests and the Club unilaterally decided what documents they would produce and did not ultimately produce the requested documents most critical to determining the bona fides of the vast majority of the transfers and transactions identified by the Investigation as potential efforts by the Club to improperly shield VTS revenues."

In other words, the Commanders (per White) stonewalled the investigation. If/when a prosecutor from Maryland, Virginia, or one of the federal districts having jurisdiction over the relevant portions of Maryland and Virginia start issuing subpoenas, complaining about the burden and cost of searching for and producing materials responsive to the subpoenas will not shield the information from discovery. Similarly, unilateral decisions to produce, or not produce, requested information will become irrelevant.

Now that the team has been transferred from Snyder to Josh Harris, it will be Harris and not Snyder who will be expected to respond to any subpoenas with information in possession of the organization. Harris will have no reason to thwart any such investigation. Unless the evidence has been destroyed (which opens the door to other potential legal problems), Harris will have access to it.

Ultimately, it comes down to whether a prosecutor with competent jurisdiction chooses to act. Typically, prosecutors proceed with criminal charges only when they are confident that one or more crimes can be proven beyond a reasonable doubt. The contents of Mary Jo White's report seem to provide a clear and obvious answer to that question.

She has provided a blueprint for aggressive prosecution. Frankly, she has gift-wrapped it.

Although prosecutors have very broad discretion both to charge and not charge individuals with crimes, it becomes difficult for any conscientious prosecutor to look at the White report and not resolve to take immediate and aggressive action to rectify the extensive fraud that White uncovered — to the tune of (per her report) at least $11 million and possibly up to $44 million more.