According to this report:
“A federal grand jury is looking into Major League Baseball teams’ international dealings and has issued subpoenas to club officials and other personnel involved in the transactions, three sources familiar with the probe told Yahoo Sports. Agents from the FBI have spearheaded the investigation, according to sources familiar with it, and lawyers from the Department of Justice who specialize in Foreign Corrupt Practices Act cases – which typically involve bribery of foreign officials – are involved as well.”
As noted in the report:
“MLB’s business in Latin America is expansive. All 30 teams have academies in the Dominican Republic and regularly scout players from Venezuela. They spend well over $100 million a year on international amateur talent. Most of the players are 16 years old and have trained since before they were teenagers in hopes of fetching large signing bonuses on July 2, the first day of the international signing period.”
While MLB may not seem like an obvious FCPA target, FCPA exposure is, at its most basic level, about having points of contact with individuals the enforcement agencies consider foreign officials even if those points of contact are not in connection with foreign government business per se according to the government.
A former baseball operations executive for an MLB club who wishes to remain anonymous provided the following statement to FCPA Professor:
“The main points of contact that MLB clubs have with foreign officials in Latin American countries are immigration officials and clerks at national registration offices. Specifically, MLB scouting staff or other club employees may interact at various times with these officials to obtain identification documents for prospects, such as birth certificates and passports. MLB club employees may also assist in the visa application process, which necessarily involves the US embassy in the foreign countries and foreign officials.
The reason why these points of contact create risk for clubs is that prospects, through their agents or handlers, commit rampant age and identity fraud, in order to appear younger and thus increase their market value. This may involve bribing clerks or immigration officials to change dates of birth on identification documents, or to fabricate false identity documents. Baseball club employees may be asked to contribute bribe money to these local officials in order to obtain the fraudulent documents, even if they do not directly interact with the foreign official. Club employees may also be offered kickbacks by the player’s agent in order to “look the other way” regarding the player’s real age or identity. The Dominican Republic and Venezuela, in particular, are countries that are rampant with corruption, and that corruption certainly permeates the baseball market.”
