The attorney general of Washington, DC, sued the Washington Commanders on Thursday, alleging the team implemented a scheme that cheated District residents out of their deposits for season tickets and used the money for its own purposes.
It is the second lawsuit brought forth by DC Attorney General Karl Racine in the past week.
In Thursday’s filing, Racine alleged that since 1996, the Commanders sold premium seating tickets to DC fans, some of which required a security deposit. The team promised these ticket holders they would automatically get the deposits back within 30 days of the contracts’ expiration, but Racine alleges the team kept the funds, in some cases for more than a decade, and used the money.
The lawsuit also says that when ticket holders asked for their deposits back, the team then “intentionally complicated the return process by imposing extra, burdensome conditions that were not previously adequately disclosed.”
A spokesperson for the Commanders pushed back on Racine’s allegations Thursday.
“The Team has not accepted security deposits for over 20 years in the case of premium tickets and over a decade in the case of suites, and we began returning them to season ticket holders as early as 2004,” a Commander’s spokesperson said in a statement Thursday. “In 2014, as part of a comprehensive review, Team management was instructed to send notices to over 1,400 customers with deposits and return all security deposits requested.”
The Commander’s spokesperson added the team had hired a law firm and forensic auditors to look into the team’s accounts, and found no evidence the team intentionally withheld security deposits that should have been returned or that the team improperly used the funds.
A representative for the NFL did not immediately respond to comment on Thursday.
Racine said in a statement Thursday the latest lawsuit demonstrates “yet another example of egregious mismanagement and illegal conduct by Commander’s executives who seem determined to lie, cheat, and steal from District residents in as many ways as possible.” He accused the team, which is owned by Dan Snyder, of “arrogance and blatant disregard for the law.”
The lawsuit also alleges a Commanders’ employee had alerted team corporate officers in 2009 that this violated contract terms, but the team continued to impose additional obligations on customers.
“As a result of these deceptive practices, the team illegally withheld hundreds of thousands of dollars from district residents,” the attorney general said.
Although the Commanders had returned some of the money to ticket holders, they still held nearly $200,000 in unreturned security deposits as of March 2022, he added. The lawsuit also alleges the Commanders forfeited thousands of dollars from DC residents’ security deposits and converted the funds into revenue for the team.
In the first lawsuit, separate from this filing, Racine said the Commanders, Snyder, the NFL and its commissioner Roger Goodell deceived DC residents about the team’s alleged toxic culture and sexual harassment for its own financial gain.
The Commanders, and Snyder, who’s owned the team since 1999, have been the subject of recent investigations by both the House Oversight Committee and the NFL for sexual harassment and financial misconduct.
In a statement last week, a Commander’s spokesperson said that the team’s owners had earlier acknowledged “that an unacceptable workplace culture had existed within their organization for several years and they have apologized many times for allowing that to happen.”
The spokesperson said that ownership agrees with the attorney general that the public needs to know the truth. “Although the lawsuit repeats a lot of innuendo, half-truths and lies, we welcome this opportunity to defend the organization — for the first time — in a court of law and to establish, once and for all, what is fact and what is fiction,” the representative said.
A review by the NFL is underway. It is being led by former SEC Chair Mary Jo White. The probe into alleged financial improprieties has sparked other various investigations into the Commanders.
The US Attorney’s Office in the Eastern District of Virginia opened a criminal investigation into the financial misconduct allegations against the team, ESPN recently reported.
Meanwhile, Snyder has put the team up for sale. The deal could value the Commanders at as much as $7 billion. The NFL has said any deal would have to go through its financial committee and win approval of 24 of the NFL’s 32 teams.