Yahoo Sports Ticket scandal rocks Kansas
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LAWRENCE, Kan. – A high-ranking member of the University of Kansas athletic department and the father of a prominent Jayhawks athlete allegedly made more than $800,000 in a ticket scalping operation that was orchestrated by college basketball power brokers David and Dana Pump, Yahoo! Sports has learned.
David Freeman
The scope, breadth and duration of the scalping business – which included Big 12 and NCAA tournament tickets – extended beyond Kansas to other schools, a source told federal authorities.
David Freeman, a Lawrence real estate developer who said he participated in the scheme, told Yahoo! Sports that he, former Kansas director of ticket operations Rodney Jones and high-profile alum Roger Morningstar – the father of Jayhawks guard Brady Morningstar – were following the instructions of the Pump brothers when the trio made hundreds of thousands of dollars scalping tickets during the 2002 and 2003 NCAA tournaments.
On Wednesday, KU announced the findings of an internal investigation into ticket improprieties, disclosing that six university employees engaged in a scam that sold off more than $1 million in basketball and football tickets over the past five years.
Freeman said the California-based Pumps – who advise schools on coaching hires and run traveling summer teams across the country – were conducting similar operations with colleges around the nation and often scalped tickets they received from college head coaches.
"It's about time everyone heard the real story," Freeman said in a phone interview two weeks ago. "It's time everyone heard the truth."
Reached by phone Tuesday night, David Pump declined to comment. Dana Pump could not be reached.
Freeman, who has a pair of drug convictions on his record from 1989, was scheduled to begin an 18-month jail sentence Thursday on an unrelated bribery charge. However, a source with knowledge of the situation said Tuesday that Freeman's reporting date has been delayed 30 days. The FBI, IRS and U.S. Attorney's office all declined comment for this story.
Timeline
June 30, 2009 – Lawrence. Kan., developer David Freeman pleads guilty to conspiracy to commit bank fraud, for his part in a federal bribery case against former Junction City Commissioner Mick Wunder. As part of a proffer agreement reached with federal prosecutors – and in hopes of decreasing his own sentence in the bribery case – Freeman also provides information about a ticket scalping operation involving NCAA Final Four and University of Kansas basketball tickets, including potential tax evasion, theft, money laundering and other possible crimes. A source familiar with the investigation confirmed to Yahoo! Sports that Freeman tied multiple individuals to the scalping operation, including college sports entrepreneurs David and Dana Pump, KU athletics department employee Rodney Jones, and former KU basketball star Roger Morningstar, the father of current Jayhawks guard Brady Morningstar.
February, 2010 – KU ticket office manager Charlette Blubaugh resigns.
March 9, 2010 – KU places athletic department employee Rodney Jones on administrative leave. Jones, the school's former ticket manager, was promoted in 2004 to director of the Williams Fund – the fundraising branch of KU's athletic department.
March 24, 2010 – The University of Kansas announces it has hired a Wichita-based firm to do an independent investigation of the school's ticket office and athletic fundraising in the Williams Fund.
April 5, 2010 – Ben Kirtland, the associate athletic director for development, resigns. Kirtland was the highest ranking athletic department employee overseeing the Williams Fund.
April 16, 2010 – Rodney Jones resigns.
April 22, 2010 – Lawrence developer David Freeman is sentenced to 18 months in prison for his role in the Junction City bribery case. Afterward, Freeman's lawyer, Carl Cornwell, reveals Freeman's role in tipping federal authorities to ticket improprieties at KU. Kansas athletic department officials decline to comment.
April 30, 2010 – KU announces that two additional employees with ties to the ticket office have resigned: Brandon Simmons, assistant athletics director for sales and marketing, and Jason Jeffries, assistant director of ticket operations.
Freeman first divulged the details of the ticket scalping in an interview with a current Yahoo! Sports reporter during the summer of 2006. He repeated the story to federal agents during multiple interviews within the last year, a source said. Both Freeman and his lawyer refused further comment for this story, citing the ongoing federal probe.
In the wake of Freeman's statements, the FBI and IRS launched an investigation into Kansas' ticket office and fundraising departments earlier this year. The school responded by placing Jones – who in 2004 was promoted to director of the Williams Fund, the primary fundraising arm of the athletic department – on administrative leave. He eventually resigned.
Jones declined to comment on the allegations.
In response to the federal investigation, KU hired a Wichita-based law firm to conduct an internal review. The probe found that at least 17,069 men's basketball tickets and 2,181 football tickets and parking passes were sold or used by KU employees for personal reasons. The investigation found the losses could be as much as $3 million. Jones, Ben Kirtland, associate athletics director for development; Charlette Blubaugh, director of ticket operations; Brandon Simmons, assistant athletics director for sales and marketing; and Jason Jeffries, assistant director of ticket operations were named in the KU investigation as being involved. All are no longer employed by the university. Tom Blubaugh, Charlette's husband who served as a consultant to the KU athletics department, was also named in the probe. Investigators recommended civil charges against all six.
"I accept responsibility because I'm the athletic director and this happened under my watch," KU AD Lew Perkins said Wednesday. "It's not easy to learn that people you trusted let you down. We thought we had every safeguard in place. Nobody picked up on it. I certainly didn't. It caught me totally off-guard."
The federal prosecution of scalping typically arises from two areas: the unauthorized sale of tickets for a profit over face value, and the failure to report financial gains on income tax returns. Potential federal and state charges could include theft, tax evasion, money laundering and other crimes.
According to Freeman, the ticket scalping operation at KU began when the Pumps contacted Roger Morningstar – Freeman's former business partner – in the winter of 2002 and asked him if he knew how to obtain extra Kansas postseason basketball tickets. The Pumps promised him that a significant amount of money could be earned by selling the seats at a price above face value.
Roger Morningstar knew that Jones, who was an assistant ticket manager at the time, was one of Freeman's close friends, so he told Freeman to ask Jones if he was interested in participating, Freeman said.
"[Roger] was told he could make a ton of money moving tickets," Freeman said. "So he comes to me and says, ' Hey, I know you know Rodney [Jones] really well.'"
Freeman said Jones agreed to participate, and the first round of scalping began during the Big 12 tournament, which took place at Kemper Arena in Kansas City in 2002. Freeman said he contacted the Pumps, who were looking for tickets in the lower level, between the baselines and only in the first 10 rows.
"We didn't mess with anything other than lower level," Freeman said. "Rodney told me what else he had left and I called the Pumps and told them. They said, 'We'll take them all. We'll take every one of them.'"
Freeman said he believed Jones was getting the tickets from the Kansas allotment, and selling whatever hadn't been purchased through the KU ticket office. According to an NCAA spokesperson, schools are expected to create their own system of tracking the dispersal of postseason tickets. However, according to the NCAA's ticket policy, "It is a violation of tournament policy to sell any substantial allocation (more than eight) of tickets directly in exchange for a donation or payment to the athletic department, institution, or related entities."
Freeman said Jones assured him the university was getting paid back for the tickets.
Freeman also said he believed Jones may have been getting additional tickets through the ticket managers of other Big 12 teams. Freeman said his job was to get the tickets from Jones and then deliver predetermined amounts to buyers waiting in hotel rooms.
"[Rodney] gave me the tickets and then I took them to the Pumps and they gave me the money," Freeman said. "They were in a hotel, the Sheraton on the Plaza [in Kansas City]. They had rooms all over the place because they had all these guys running tickets. … I was either taking them to the Pumps or whoever they directed me to take them to.
Rodney Jones
"Roger never wanted to go get [the tickets] from Rodney. Once we had the tickets, Roger [at the direction of the Pumps] would say, 'Take these 10 here and these 20 here and then we'll come back and count the money.'"
Freeman said the financial gain started out relatively small in this first run, with the Big 12 tickets yielding around $40,000. Freeman said Jones took a $20,000 cut, while Freeman and Roger Morningstar split $20,000 evenly.
When Yahoo! Sports approached Roger Morningstar at his Lawrence residence, he said because of ongoing "legal issues" he had been advised by his lawyer not to speak about Freeman. When asked if he was aware Freeman had also spoken to the federal authorities about the Pump brothers' alleged involvement in scalping tickets from the KU ticket office, Roger Morningstar shrugged.
"That's old news," he said. "That's all old news."
Freeman said the scalping continued through the ensuing 2002 NCAA tournament. He said the dollar amounts and tickets grew exponentially at the Final Four in Atlanta that year, with the sale of "books" of tickets. Books included one ticket for each semifinal game, and one ticket for the national championship.
Shortly after arriving at that Final Four, Freeman said he was summoned to the team hotel by Jones, who handed him 20 books of tickets. Freeman said he took the tickets to a buyer, who paid him $3,000 per book – or $60,000 total. Later that evening, Freeman said Jones called him again and told him he had obtained another 20 books.
"He said 'Come get 'em,'" Freeman said.
Freeman said that once Kansas lost to Maryland in the semifinal game, they were awash with tickets for the national championship, as hundreds of Kansas alumni were looking to get rid of their title game seats. He said Jones contacted him and told him he had more tickets to move before the national championship. The going rate: $1,500 each. Freeman said he delivered the tickets to buyers staying at the Hilton, the Hyatt and another hotel in downtown Atlanta.
David and Dana Pump.
(Special to Yahoo! Sports)
"There was a ton of them," Freeman said of the tickets. "We made a half-million dollars [that weekend]. I got on the MARTA with $200,000 in each pocket. It was all in one-hundred dollar bills. Every $10,000 had a paper clip and they were rolled up.
"I met Rodney at the service door behind the Marriott in Buckhead. I counted out [his share] right there: 200 grand."
Pressed for details on who he was delivering the tickets to in the hotel rooms, Freeman refused.
"Not going there," Freeman said. "One of them was about 250 pounds and he [expletive] talked like [he had a New Jersey accent]. You seen Goodfellas? I don't know who the [expletive] they were. I can honestly tell you, I don't know who the [expletive] they were. It was 'This is the room you go to, this is the guy you need to see.' There were no [expletive] names. The door would open and a guy would be standing there with a gun. You walk in, do the deal and you're out."
Freeman said the process was repeated again in 2003 for the Big 12 tournament in Dallas, the West Regional in Anaheim and the Final Four in New Orleans. In this case, other schools' ticket managers, who Freeman alleged had been contacted by Jones about securing and scalping their tickets, were increasingly involved. But because Kansas advanced to the championship game, it created a greater demand by alumni. Freeman alleged the group made less than the previous year – about $300,000.
The KU internal investigation found that scalping from inside the Kansas ticket office stretched beyond 2003.
Published reports also indicate impropriety in a season ticket ranking "points system" for Kansas basketball games at Allen Fieldhouse. The system, which was created and spearheaded by Perkins after his hiring at Kansas in the spring of 2003, established a way to prioritize the quality of season tickets available to alumni. The system is based on a multitude of factors – most prominently including financial donations to the school's athletic department. The larger the donations, the higher the priority alumni receive for season tickets.
But recent reports have profiled donors who are dissatisfied with the system's shrouded points formula, as well as allegations of prime seats in Allen Fieldhouse ending up on online auction sites or in the hands of ticket brokers.
Since their alleged involvement with the KU scalping ring, the Pumps' influence has continued to grow throughout college basketball. Their activities include scalping tickets obtained from coaching staffs, hosting a well-known and lavish annual charity retreat for coaches and athletic directors and operating "ChampSearch" – a consulting firm retained by universities looking to hire new head basketball coaches. Simultaneously, the Pumps finance multiple elite traveling summer basketball teams that showcase recruits, some of whom have ended up with the programs that the Pumps do business with.
Roger Morningstar has coached some of those summer traveling teams, one of which included his son, Brady, who committed to Kansas in 2006. Since Jones, Freeman and Roger Morningstar allegedly engaged in scalping tickets through the Pump brothers in 2002, summer traveling teams financed by the Pump brothers have featured at least nine players who went on to play for the Jayhawks. Among them were nationally recruited players Mario Chalmers, David Padgett, Omar Wilkes, Tyrel Reed, Elijah Johnson, Jeff Withey, Travis Releford and Brady Morningstar.
Chalmers' father, Ronnie, also coached the Pump brothers' summer traveling team in Alaska, before being hired as the director of basketball operations at KU in 2005. He eventually resigned that position in 2008. And the sons of head coach Bill Self and assistant coach Danny Manning – Tyler Self and Evan Manning – are both currently listed on the rosters of the Pump brothers' summer traveling teams. Coach Bill Self and Perkins have attended the Pumps' annual retreat held for coaches and administrators.
Contact Yahoo! Sports investigative reporter Charles Robinson at windycityscribe@yahoo.com
Cast of characters
Dana and David Pump – Usually referred to as "The Pumps," the twin brothers are among the most powerful people in all of sports. Colleges often employ their "ChampSearch" consulting firm during coaching searches, and they're also known for their youth basketball camps and their Pump N' Run summer traveling basketball teams, many of which feature some of the most heavily recruited prospects in the nation. The Pumps have also made a significant amount of money by scalping Final Four tickets, a practice they've never denied.
Roger Morningstar – A starter on Kansas' 1974 team, Morningstar worked for Converse Shoe Co. for 20 years before opening a youth sports facility in Lawrence. Morningstar has worked in the real estate development business, where he was once a business partner of Dave Freeman. Morningstar – the father of current Kansas basketball player Brady Morningstar – has also coached one of the Pump Brothers' local summer traveling teams: KC Pump N' Run.
Dave Freeman – In April, the Lawrence-based developer was sentenced to 18 months in prison after pleading guilty to a bribery charge. In an attempt to decrease his sentence, Freeman provided federal agents with information regarding an NCAA tournament ticket scalping ring at the University of Kansas that was allegedly orchestrated in 2002 by The Pumps and Roger Morningstar and also involved Rodney Jones.
Rodney Jones – Kansas' former ticket director joined the athletic department in 1997 and was promoted to director of the Williams Educational Fund in 2004. The WEF is the primary vehicle that Kansas boosters use to contribute money to the athletic department and acquire basketball tickets. An Oklahoma graduate, Jones was placed on administrative leave in March. He later resigned.
Charlette Blubaugh – A former assistant ticket manager at Oklahoma, Blubaugh replaced Jones as Kansas' ticket director after Jones' promotion in 2004. Blubaugh's husband, Tom, is the former ticket manager at Oklahoma. Blubaugh resigned in February. Her name was featured prominently in the results of Kansas' internal probe, which was released Wednesday. Blubaugh is now the executive administrative assistant to the athletic director at the University of Central Oklahoma.
Lew Perkins – Recently labeled as one of the top 35 sports executives in the world by Time Magazine, Perkins was hired as Kansas' athletic director in the spring of 2003. Under Perkins, Kansas' $27 million athletic budget has grown to $55 million. Perkins, however, has been unpopular with some Kansas boosters because of implementation of a "points system" at Allen Fieldhouse. Under the system, the best seats are awarded to the individuals who earn the most points. Points are based on monetary contributions to the Williams Educational Fund. Before his hiring at Kansas, Perkins was Connecticut's athletic director from 1990-2003.
Brandon Simmons and Jason Jeffries – Each had ties to Kansas ticket office before resigning on April 30. Simmons was the assistant athletics director for sales and marketing. Jeffries was the assistant director of ticket operations.
Ben Kirtland – Kansas' former associate athletic director for development resigned last month after federal law enforcement began looking into possible illegalities regarding ticket sales. Kirtland was ultimately responsible for all of the athletic department's fundraising activities and also served as Jones' main supervisor. Kirtland, who joined Kansas' staff in 2004, worked for Kansas athletic director Lew Perkins when Perkins held the same title at Connecticut.
