Posted on 08/28/2002 1:56:14 AM PDT by My Favorite Headache
Stadium Naples: ESPN founder pleads guilty to reduced charges in fraud case
Wednesday, August 28, 2002
By GINA EDWARDS, gvedwards@naplesnews.com
Bill Rasmussen, the ESPN founder who left Naples three years ago under a cloud of debt, pleaded guilty Tuesday to reduced charges in the fraud case involving the failed Stadium Naples golf arena.
As part of a plea deal, special prosecutors agreed to drop a corruption charge in a separate case against Rasmussen in exchange for his testimony and cooperation against former Collier County Commissioner John Norris and others.
ESPN founder and Stadium Naples partner Bill Rasmussen, right, confers with his attorney, Jerry Berry, as Rasmussen prepares to enter a guilty plea Tuesday at the Collier County courthouse. As part of a plea deal, special prosecutors agreed to drop a corruption charge in a separate case against Rasmussen in exchange for his testimony and cooperation against former Collier County Commissioner John Norris and others. Lisa Krantz/Staff
Rasmussen, 69, will be sentenced to two years of probation if he fulfills his obligation to cooperate with investigators. If he lies or otherwise doesn't cooperate, Rasmussen could face between six months and two years in jail, and prosecutors may re-file corruption and other charges and use Rasmussen's statements against him.
As part of his deal with prosecutors, Rasmussen pleaded guilty to two reduced counts of making a false statement to obtain property, both first-degree misdemeanors with a top penalty of one year in jail. All other charges — felonies — were dropped.
Rasmussen could have faced up to 30 years in prison if convicted of the racketeering conspiracy charge in the public corruption case. He faced up to 30 years in prison if convicted of organized fraud and three counts of communications fraud in the stock case.
On Tuesday, Rasmussen admitted lying to three customers of A.S. Goldmen & Co., the defunct Naples brokerage firm dubbed one of the nation's most notorious boiler rooms by regulators because of brokers' high-pressure telephone sales tactics.
One of those investors who lost tens of thousands of dollars, Morton Goldberg, said Rasmussen is getting off too light. The retired east coast fund-raising director said Rasmussen reassured him the project was on track with land purchases and had support from big-name golfers such as Arnold Palmer.
"It's very offensive for people who've invested money and been taken to find out Rasmussen is still going to lead a wonderful lifestyle and only pay a minor penalty," Goldberg told the Daily News. "As far as I'm concerned he was part of the cheerleading team and part of the conspiracy," he added later.
Goldberg, who said he has had to come out of retirement because of his losses, said Rasmussen should be forced to pay restitution to investor victims.
"It's really unfair. ... The only ones who are going to pay a price are me and the other investors," Goldberg said.
When they charged Rasmussen in the stock case in February, prosecutors said Rasmussen not only knew about Goldmen's hard sell, he helped pitch customers to buy stock in a company partnering on his second attempt at Stadium Naples. Rasmussen's first attempt at Stadium Naples — the subject of corruption charges involving Norris — failed in July 1997.
In court Tuesday, Special Prosecutor Angelica Zayas said Rasmussen provided false promotional material to stockbrokers at A.S. Goldmen & Co., knowing they would use the brochures to try to persuade customers to buy stock in Millennium Sports Management Inc., a Stadium Naples partner company. She said Rasmussen also spoke to three Goldmen customers, which resulted in them losing money. The investors collectively lost more than $50,000, case documents say.
Wearing a dark gray suit, Rasmussen, who now lives in Hilton Head, S.C., was fingerprinted following his guilty plea. He and his Naples attorney, Jerry Berry, issued a written statement afterward saying they declined to comment based on Collier Circuit Court Judge Lauren Miller's wishes. Special prosecutor Angelica Zayas also declined to comment, citing Miller's instructions.
During the plea, Miller asked Rasmussen if he understood the consequences of his plea agreement, including giving up his right to a jury trial and his right to question witnesses. In a soft voice, he repeatedly said yes.
Miller, as has been her custom in the corruption case, asked prosecutors if the plea deal is good for the state of Florida and good for the people of Collier County.
Zayas said yes.
Miller set sentencing for Rasmussen sometime after the scheduled March 2003 Stadium Naples trial. It will be Miller's call on whether to adjudicate Rasmussen guilty. As part of the plea agreement, prosecutors agreed to remain silent on that point at sentencing.
Norris, the former county commissioner, is accused of selling his influence to get a no-money-down piece of Rasmussen's first Stadium Naples deal. The 12.5 percent share was at one time valued at $7.5 million based on profit projections. Norris denies wrongdoing.
In Naples, Rasmussen ran Naples' Senior PGA golf tournament in 1997 and 1998 as head of the nonprofit Challenge Foundation that he created. When Rasmussen lost promoting rights in 1998, the tournament had debts topping $1 million. The more than $700,000 in tournament proceeds he promised to the Quest for Kids charity scholarship program with an oversized cardboard check on the 18th green never materialized.
Rasmussen secured $1 million in county grant money for the financially faltering senior PGA tournament in 1996 and 1997 and later lobbied commissioners to waive audits of the grants. Auditors found nearly $200,000 in misspending connected to the grants. Special prosecutors who later took over the case said recently that Rasmussen misappropriated county grant money.
The tournament was slated to have Stadium Naples, a planned 12,000-seat golf spectator arena, as its future home. And the tournament was key to Stadium Naples' success.
The first Stadium Naples deal collapsed in July 1997 following a public outcry over Norris' role.
Immediately, Rasmussen launched a new effort to revive Stadium Naples plans with A.S. Goldmen & Co.
A.S. Goldmen's Naples owner, Anthony Marchiano, was convicted of stock fraud and racketeering in July 2001 in Manhattan State Court in connection with manipulating the stock of Millennium Sports Management Inc. as part of Rasmussen's second attempt at Stadium Naples.
Marchiano, who was convicted of manipulating the stocks of nine small companies and bilking investors nationwide out of nearly $100 million, is serving up to 30 years in prison, with the possibility of parole in 10 years. He has been ordered to pay $8 million in restitution.
Prosecutors with Manhattan District Attorney Robert Morgenthau's office said Marchiano and others at Goldmen made $8 million in illicit profits on Millennium stock at the expense of average investors who got wiped out. Regulators called it a pump-and-dump, a scheme to pump up the stock price so insiders could dump their shares at high profits. Today the stock is worth pennies a share and no longer trades on the NASDAQ.
Goldmen brokers used Rasmussen's involvement to hype stock in Millennium, a financially failing New Jersey company that had never made a profit. Brokers, who were later convicted of lying and passing insider information, told investors that Rasmussen had the golden touch and his involvement would make Millennium's stock spike.
In Naples, Rasmussen touted himself as ESPN's founder and extolled his place on Sports Illustrated's list of those who have most impacted sports during the past 40 years. Rasmussen left the network in its infancy. He launched the company in 1979, left a decision-making role by late 1980 and was off the board of directors by 1981. He sold his last shares of stock in 1984.
State Attorney Joe D'Alessandro, during his initial probe of Stadium Naples that resulted in no charges, bought Millennium stock from brokers at A.S. Goldmen.
Judge Miller later threw D'Alessandro off the case, saying he had a conflict of interest. And she criticized D'Alessandro for giving Rasmussen immunity in October 2000.
That limited immunity deal for Rasmussen and other immunity deals have erected roadblocks for the special prosecution in pursuing the complex case.
The 5-year-old corruption case has netted charges against 10 people, five of whom have pleaded guilty or no contest to participating in a racketeering conspiracy in which public officials and business leaders bought and sold influence.
Besides Rasmussen, others who have pleaded guilty or no contest are former County Commissioners Tim Constantine and Tim Hancock, former County Manager Neil Dorrill, real estate mogul Bob Hardy, who is Paul Hardy's father, and convicted financial swindler David Mobley.
Norris, Stadium Naples developer partners Paul Hardy and Renee Tolson and attorney Leo Salvatori, who all deny wrongdoing, are scheduled to go to trial in March 2003.
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