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NHL Union Founder Eagleson Indicted : Pro hockey: Government seeks to regain at least $2 million in schemes involving misuse of money.

March 04, 1994|LISA DILLMAN | TIMES STAFF WRITER

BOSTON — R. Alan Eagleson, who rose to power as the founder of the NHL Players Assn. and agent of such star players as Bobby Orr, was indicted Thursday by a federal grand jury on charges of racketeering, fraud, obstruction of justice and embezzlement.

It was alleged in the 32-count indictment that Eagleson engaged in various criminal schemes by using his former position as executive director of the players' association and as a player agent for the purpose of acquiring personal wealth and profits.

The government wants Eagleson to turn over $2 million in cash and assets, money that would eventually be funneled back into the players' union.

"There was a misuse of trust that can't always be measured in dollars," U.S. Attorney Donald K. Stern said at a news conference.

Eagleson's lawyer, Jeremiah T. O'Sullivan issued a statement questioning whether the U.S. government had jurisdiction in the case since Eagleson is a Canadian citizen and the NHLPA is a Canadian labor organization.

"A quick review of the indictment reveals that it is remarkably vague . . . and contains nothing more than a rehashing of stories which have been circulated in the press for a number of years," said O'Sullivan, a former federal prosecutor.

Stern said that at times material to this indictment, a substantial majority of NHL teams were located in the United States. When Eagleson resigned in December 1991 as executive director of the NHLPA, there were 22 teams in the league and 15 were located in U.S. cities.

NHL Commissioner Gary Bettman said in a statement: "Throughout the grand jury's investigation the NHL and its clubs have cooperated fully with representatives of the FBI and the United States Attorney's Office. We will continue to do so. We are pleased that the grand jury's investigation apparently disclosed no misconduct by any NHL (official) or NHL club official. Since the charges against Mr. Eagleson are now before the courts, we will have no further comment."

A handful of NHL players were interviewed by authorities about Eagleson, including the Kings' Wayne Gretzky. Gretzky said he was interviewed "for about five hours" by the FBI last year.

It is expected that Eagleson, 61, could be arraigned within a couple of weeks. The trial probably would not start until this fall, Stern said. The charges carry different penalties. For instance, the count of racketeering could bring a maximum 20-year prison term and a maximum fine of $250,000. Each count of embezzlement of labor organization assets has the maximum of a five-year term and a $250,000 fine.

The FBI phase of the investigation into Eagleson focused on allegations that he defrauded the union and misappropriated funds from hockey tournaments, including the Canada Cup. A 1991 investigation by Russ Conway of the Eagle-Tribune of Lawrence, Mass., reported that of the $24 million the Canada Cup raised in revenues, 75 cents of each dollar went for expenses.

The indictment also included allegations that Eagleson:

--Embezzled substantial NHLPA funds by claiming reimbursement for personal charges and expenses.

--Wrongfully converted NHLPA assets by lending out millions of dollars in the form of private mortgages on very favorable terms to close personal and business associates.

--Received kickbacks and other things of value totaling more than $100,000 from insurance brokers and others, in connection with his purchases of disability insurance policies on behalf of the NHL and NHLPA.

--Obstructed and attempted to obstruct justice after the initiation of the investigation by causing a witness to alter and destroy various documents and records.

--Defrauded two former NHL players, Glen Sharpley and Bob Dailey, and embezzled at least $5,000 from each in connection with the processing of disability claims on behalf of each player.

--Made repeated, materially false representations to the NHLPA membership to conceal his unlawful activities.

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