Allegations of withheld security deposits from season-ticker holders and diverted ticket sales to avoid giving the other teams their cut sparked a review of the financial habits of the Commanders. A secret $55 million loan discovered along the way may be the thing that brings the house down for Daniel Snyder.
Don Van Natta, Jr. of ESPN.com lays out the various facts and circumstances surrounding a transaction that he become the “primary focus” of federal prosecutors in Virginia.
The loan (technically a line of credit) initially emerged as an issue in the arbitration pursued by Snyder’s former minority partners.
The problem, for Snyder, traces to the notion that the loan was obtained without express approval of the team’s board of directors. Bank of America, which made the loan, repeatedly asked for proof of board approval. But board approval never was provided.
Per the ESPN.com report, a lawyer representing the team eventually admitted that approval does not exist.
Once the loan became an issue in the arbitration, the NFL reportedly pushed for the parties to submit the dispute to mediation, where it was resolved.
“Three billionaires — not a few whistleblowers — alleged to the NFL arbitrator that their partner had possibly committed bank fraud,” an unnamed source with firsthand knowledge of the proceedings told Van Natta. “This is jail time type of fraud. The NFL owes them as much of a fair shake as it owes Snyder. And the league had no interest in finding out what happened. They buried it and didn’t investigate it and covered it up.”
That makes this loan a major potential problem for Snyder. It also could become a problem for the league, if/when the prosecutor explores whether any effort to conceal potential “bank fraud” creates a crime of its own.