Mo. AG says fantasy leagues were scams
JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a lawsuit on Monday against an Alparetta, Ga.-based fantasy sports operator for allegedly defrauding Missouri consumers.
Dustin Ashby and his company, Gridiron Fantasy Sports, allegedly failed to pay out the cash and other prizes the company promised to winning fantasy league owners. Ashby ran the World Championship of Fantasy Football and the World Championship of Fantasy Baseball both in Missouri and throughout the country. He operated the leagues from an office in Chesterfield.
Participants in the fantasy baseball and football contests paid entrance fees for a chance to win pre-set cash prizes.
Prior to the beginning of the 2010 fantasy football season, the defendants promised to pay cash awards to as many as 331 participants, totaling a minimum of $389,500, based on the performance of individual fantasy teams, Koster says. The person whose team scored the most fantasy points in each league during the regular season was guaranteed a cash prize of $5,000. There were as many as 100 leagues, based on the number of participants.
The defendants notified the winners at the end of the 2010 season and told them the amount they won. The defendants allegedly promised to pay the winners by Feb. 15 and even went on ESPN during Super Bowl XLV and presented the grand prize winner with an oversized check for $300,000. The check was allegedly not fully honored.
Koster alleges that the defendants failed to pay out at least $151,261 of the promised prize money. The lawsuit alleges that the defendants were using the fantasy baseball entrance fees to pay the fantasy football winners and the football entrance fees to pay the baseball winners. As a result of this system, the defendants could not guarantee prize-winning amounts because the payouts would be dependent on the number of participants. The lawsuit also alleged that the defendants used some of the entrance fee money for non-contest purposes, such as paying off loans.
Koster is seeking preliminary and permanent injunctions prohibiting further violations of the law, as well as a civil penalty and an amount equal to 10 percent of total restitution ordered. Koster is also asking that the court require the defendants to provide full restitution to victims and pay all court costs.