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HomeUSLeaders settle consumer protection lawsuit for $625,000

Leaders settle consumer protection lawsuit for $625,000


Washington leaders have settled a consumer protection lawsuit in the District of Columbia over allegations that the NFL team improperly withheld ticket deposits from fans. However, billionaire owner Dan Snyder and his team still face other civil lawsuits in D.C. over what the attorney general’s office called collusion to deceive residents about the team’s toxic workplace culture.

On Monday, Attorney General Brian L. Schwalb announced the agreement returning $200,000 to the fans and paying the district $425,000 to resolve claims over the deposits. His predecessor, Carl A. Racine filed a consumer protection lawsuit late last year before leaving office, and Schwalbe took over the case.

The county’s investigation showed that the team deceptively kept fan deposits for years after ticket contracts had expired, improperly used that money and in some cases made it difficult to get a refund.

“Instead of being transparent and open in their ticketing practices, the Leaders illegally exploited the fan base, withholding rather than returning security deposits,” Schwalbe said in a statement. “Under this Settlement Agreement, our office will maintain strict oversight of the Leaders to ensure that all necessary steps are taken to compensate fans of the refunds to which they are entitled.”

The district still has an ongoing civil lawsuit against Chiefs, Snyder, the NFL and Commissioner Roger Goodell over pending sexual harassment and hostile workplace claims. The league’s investigation into the team resulted in a $10 million fine but no written report was filed, prompting outrage and congressional review.

Commander owner Dan Snyder and his wife, Tanya, have faced several recent lawsuits

At least one fan is looking forward to Snyder's departure as the driving owner

At least one fan is looking forward to Snyder’s departure as the driving owner

The leaders previously settled with Maryland on season ticket holder deposits by agreeing to return the money and pay the state $250,000.

Under the terms of their recent settlement with the district, the leaders must conduct a public records search to obtain contact information for affected fans and attempt to notify them, disclose the refund process on their website, and provide the district attorney’s office with regular reports documenting their progress.

“We haven’t accepted security deposits or seat authorizations in over a decade, and we’ve been actively working to return any remaining deposits since 2014,” a Commanders spokesperson said in an email to the AP. “We are pleased to have reached agreement on this matter with the D.C. Attorney General and will work with the office to fulfill our commitments to our fans.”

The series of lawsuits in the Washington area was among the latest turns in the team’s turbulent race under Snyder, who with his wife Tanya chartered a company in November to explore selling part or all of the team. This came amid multiple investigations and two weeks after Indianapolis Colts owner Jim Irsay said there was an “advantage to remove” Snyder.

Two groups, one led by Josh Harris and Mitchell Rales and including Magic Johnson and the other by Canadian billionaire Steve Apostolopoulos, have made fully funded bids to buy the leaders. It’s unclear when the sale could happen soon; Snyder must first choose his preferred bidder and send it to the league for approval.

Last fall, with multiple investigations continuing into the team’s workplace culture, finances, and Snyder himself, he and his wife, Tanya, hired a firm to “look into potential transactions.” Tanya continues to represent the team at league events amid sexual harassment and business malpractice investigations against the team and her husband.

The county's investigation showed that the team had deceptively kept fan deposits for years

The county’s investigation showed that the team had deceptively kept fan deposits for years

Snyder and his attorneys are demanding that the NFL and league owners reimburse him for legal liability and future costs if he sells the team, one of the people told the Associated Press. Two of the owners said they were angered by Snyder’s demand for compensation, but told the Associated Press they wanted to let the sale begin before taking any action.

The 58-year-old billionaire has faced calls from fans to sell the struggling team for years, but pressure has been building since 2020 amid accusations of sexual harassment, financial irregularities, obstruction of the team and Snyder himself. While the leaders fired several individuals accused of sexual harassment and fined the NFL $10 million, Snyder defiantly denied the charges against him in the face of several investigations, including a congressional one.

Following a recent Washington Post report that Snyder was seeking compensation should the team be sold, ESPN reported in March that FBI and IRS agents were investigating allegations that Snyder took out a $55 million loan without his minority partners’ knowledge at the time.

After years of wrangling, Snyder bought out minority owners Dwight Scharr, a homebuilder executive, Black Diamond Capital CEO Bob Rothman, and FedEx founder Fred Smith in the spring of 2021. The trio had previously filed an injunction hoping to allow him to sell their 100% stake. 40.5 percent of the team, which Snyder eventually bought after the NFL agreed to waive debt limits, allowing him to take out a $450 million loan from Bank of America.

A federal grand jury has since issued subpoenas regarding the team’s finances, according to ESPN.

Then-Attorney General Karl Racine (L) announced the lawsuit in November

Then-Attorney General Karl Racine (L) announced the lawsuit in November

The former minority partners reportedly demanded an NFL investigation into the alleged $55 million loan during a confidential arbitration hearing, but at least one source familiar with the proceedings told ESPN that Schar, Smith and Rothman believed league commissioner Roger Goodell and general counsel Jeffrey Bash they took sides. with Snyder.

If Snyder had taken out the $55 million loan without informing his former minority partners, he would have violated the team’s shareholder agreement, according to documents obtained by the Associated Press.

Bank of America officials repeatedly requested proof that the board approved the loan, only to close the deal without receiving any such confirmation. Documents obtained by the AP show that one of the team’s attorneys acknowledges in a letter that board approval was never granted.

A Bank of America spokesperson declined to comment to DailyMail.com.

Documents show Less than a week after Schaar, Rothman, and Smith pushed NFL arbitrators to investigate the loan, the NFL moved to end arbitration proceedings.

Frustrated, Schar, Rothman and Smith hesitantly agreed to let Goodell mediate the dispute, according to ESPN.

The NFL never investigated the loan, and Snyder was never sanctioned for allegations of financial misconduct.

Snyders is exploring the possibility of selling the team to appease the many fans

Snyders is exploring the possibility of selling the team to appease the many fans

In a statement, NFL spokesperson Brian McCarthy said, “The parties had a series of disputes, which were authorized for the Commissioner to arbitrate as required by league rules. The Commissioner appointed a highly respected attorney as arbitrator and neither party contested this appointment.”

McCarthy continued, “Several months later, the parties were asked if they were interested in participating in confidential mediation with the commissioner, which they agreed to do.”

The mediation lasted for two days and the parties then reached an agreement whereby the three limited partners would sell all their interests in the team to Mr. Snyder at an agreed price and other terms. All were represented by highly sophisticated legal and financial advisors. The Agreement includes a complete disclaimer of all claims that have been or could have been asserted by any party to the arbitration proceedings.

Leaders attorney John Brownlee did not respond to ESPN’s questions about the alleged $55 million loan, but said the team is cooperating with the Justice Department’s request for financial records in the lawsuit that was settled Monday.

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