The Washington Commanders will pay a $250,000 penalty and agreed to return security deposits to former season ticket holders after reaching a settlement with the Maryland attorney general’s office.
Maryland Attorney General Brian Frosh announced Friday that the agreement was reached and the Commanders must issue refunds within the next 30 days. If payments are undeliverable, then the team must turn the funds over to the state to be held as unclaimed funds.
The settlement comes following a months-long investigation by Mr. Frosh’s office after it was alerted by Congress that the Commanders may have committed financial improprieties, based on the testimony of a former team employee who alleged the team intentionally withheld refundable security deposits from season-ticket holders.
The announcement was also made a day following a second lawsuit from D.C. Attorney General Karl A. Racine, who is suing the team for withholding security deposit refunds from former season ticket holders who lived in the District.
According to Mr. Frosh’s office, the Commanders were required to return the deposits within 30 days after contracts expired or were terminated, but did not do so unless the former ticket holders requested the return in writing. Mr. Frosh said the actions were a violation of Maryland’s Consumer Protection Act.
“For many years, the Commanders kept money that was not theirs,” Mr. Frosh said in a statement. “Today’s settlement will require the team to return the monies owed to consumers. The Commanders will pay a penalty and they will be enjoined from engaging in similar practices in the future.”
According to the settlement document, the Commanders denied it violated Maryland law and nothing in this Assurance shall constitute an admission of liability.” The team said it made an effort to send notices to more than 1,800 account holders with an outstanding security deposit balance in an effort to refund the money.
Mr. Frosh’s office, in the settlement document, alleged that the Commanders’ “express and implicit representation that it would refund their security despots, when, in fact” they did not was a “misrepresentation” and “constituted an unfair or deceptive trade practice” under Maryland law.
“The Washington Commanders has not accepted security deposits for more than 20 years in the case of premium tickets and more than a decade in the case of suites, and we began returning them to season ticket holders as early as 2004,” the Commanders said in a statement. “In 2014, as part of a comprehensive review, team management was instructed to send notices to more than 1,400 customers with deposits and return all security deposits requested.”
“Further, the team engaged an outside law firm and forensic auditors to conduct an extensive review of the Commanders’ accounts and it found no evidence that the team intentionally withheld security deposits that should have been returned to customers or that the team improperly converted any unclaimed deposits to revenue.”
Mr. Frosh’s investigation wasn’t publicly acknowledged until Friday’s announcement. The Commanders currently face a series of other probes from the House Oversight and Reform Committee, the NFL, the Virginia attorney general and the U.S. attorney’s office in the Eastern District of Virginia.
Mr. Racine also has brought two lawsuits against the Commanders after a year-long investigation.
• Matthew Paras can be reached at mparas@washingtontimes.com.
Please read our comment policy before commenting.