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Three former Sox scouts indicted for taking kickbacks

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David Wilder, shown (right) in 2005, was the White Sox senior director of player personnel. Sox books were said to show Juan Silverio signed for $600,000, but he allegedly was told by indicted scouts he signed for $300,000.

The shelf life on minor-leaguers in the lower levels of a baseball organization's farm system is a short one. There's a new line of players forming behind you each year, so you're either moving up or moving out.

Infielder Juan Silverio knows that all too well, bouncing between Class A Rookie League and Class A Kannapolis since signing with the White Sox as a 16-year-old out of the Dominican Republic on Aug. 20, 2007.

Silverio now finds himself on that cliff ledge, hanging on for dear life to his big-league dream. The difference is if Silverio happens to lose that grip and fall into the vast sea of failed prospects from other countries, certain members of the Sox organization -- past and present -- that were responsible for his signing would not be surprised. Actually, many of them might have preferred that Silverio had disappeared.

Silverio is a bad word in the offices at 35th and Shields -- not because of anything the youngster did, but because of the past he conjures up.

There was a nasty reminder of that past Wednesday, when former White Sox senior director of player personnel David Wilder and two former Latin American scouts for the club were indicted on federal fraud charges for allegedly accepting kickbacks totaling about $400,000 from signing bonuses and contract buyouts paid to secure 23 prospective players between December 2004 and February 2008.

The seven-count indictment returned by a federal grand jury alleges that the White Sox were defrauded of money ''as well as the honest services of the defendants, who allegedly concealed the kickbacks from senior members of the organization.''

Wilder, 50, and Jorge L. Oquendo Rivera, 49, White Sox Latin American scouts between November 2004 and October 2007, were charged with seven counts of mail fraud. Victor Mateo, 39, a Sox scout in the Dominican Republic between November 2006 and May 2008, was charged with three counts of mail fraud. The indictment also seeks forfeiture of unspecified illegal proceeds from the alleged fraud scheme.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory.

''The defendants were supposed to recruit players by paying amounts of money that matched their skills and were no greater than the amount needed to sign the players,'' U.S. Attorney Patrick Fitzgerald said. ''Instead, the indictment alleges that the defendants secretly inflated those signing amounts to fund kickbacks for themselves.''

On May 16, 2008, the Sox announced the firings of the three members from the club's Latin American scouting staff, including Wilder, one of general manager Ken Williams' closest friends. The three were dismissed for actions in Latin America that were ''violations of club policy and standards.''

The terminations resulted from findings of a two-month investigation conducted by Major League Baseball's Department of Investigations, which worked closely with federal authorities on their two-year investigation.

The White Sox issued the following statement: ''The Chicago White Sox commend the diligence and hard work shown by federal authorities and Major League Baseball in reaching today's indictments. Since the White Sox first reported our internal findings to Major League Baseball, MLB and its clubs have taken important and positive steps to establish processes in Latin America that are designed to better protect Latin players, as well as Major League Baseball's teams, from being victimized by illegal activities related to scouting and signing players.''

According to the U.S. Attorney's office: ''Wilder was responsible for supervising the team's scouts in Latin America, and he either authorized payments himself, or obtained authorization from additional Sox personnel, to sign new players based on recommendations made by the scouts.''

Wilder was authorized to approve payments less than $100,000 but needed approval from Williams for amounts more than $100,000, according to the U.S. Attorney's office. After such approval was given, MLB would conduct its own background check and approve the signing.

A major-league source said it's not surprising Williams was kept in the dark.

''From everything I was told and what I saw, [Wilder] had free rein,'' the source said. ''Kenny gave him a lot of power to handle their business [in the Dominican Republic], and questions weren't asked.''

Wilder apparently was keeping a lot of things from his good friend, including the fact that despite a reported $185,000 salary in 2007, Wilder owned six houses at once in his Arizona-based home-flipping business, as well as a failing night spot called Club Burn that was voted Phoenix's top gay bar in 2007.

MLB quietly has cleaned up a growing mess that was developing in the Dominican a few years ago, especially when former Washington Nationals general manager Jim Bowden and special assistant Jose Rijo also were investigated by MLB for the financial scandal erupting there. Rijo was fired by the Nats, and three days later, Bowden resigned. Neither was criminally charged, but the Nats immediately cut ties with Rijo's baseball academy in the Dominican.

The problem with baseball in the Dominican starts with the local talent brokers known as ''buscones.'' Many of these ''buscones'' have ties with the local government, so they can sign promising players to contracts as young as 10 years old without grabbing unwarranted attention.

Many of these younger players become entrenched in the growing number of major-league academies that have sprouted up in the Dominican as well as Venezuela. But by the time these players start popping on the radar of major-league scouts, the ''buscones'' had been suspected of not only loading them up with performance-enhancement drugs, but altering birth certificates. In some cases, major-league teams have no idea if what they see in a prospect is real.

Silverio and then-16-year-old outfielder Rafael Reyes were two names that were made public in the scandal Wilder was running.

ESPN reported that Reyes was given a $525,000 bonus from the Sox, and Reyes' uncle then gave Victor Mateo a $50,000 gift after the signing. Mateo told ESPN that he then passed $45,000 of that onto Wilder.

Silverio's account of what happened with him was much different.

While the infielder would not return messages that were left for him in Spanish by an interpreter assisting the Sun-Times, word leaked from his teammates that Silverio was signed for $600,000 in the Sox' books, but was told by the Wilder group that he was signed for $300,000.

As for Reyes, he no longer can be found in the Sox system. That's not a big surprise because, according to sources, Wilder and his group purposely inflated talent to justify the bonus money needed, and at the same time made sure the player didn't climb high enough in the farm system where he could argue about the discrepancy of his listed bonus and what he actually received.

As for Silverio, he still is hanging on to the dream.

He finished the 2010 season back in low A ball with Kannapolis, but hitting just .200 with 57 strikeouts and six walks in 236 plate appearances. The infielder committed 22 errors in just 75 games.

And the grip on his dream is loosening. If Silverio doesn't show something soon, he will disappear into obscurity.

''These defendants allegedly defrauded their employer and enriched themselves by taking advantage of vulnerable ballplayers who were anxious to pursue their dreams of stardom in the major leagues,'' said Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the FBI.