College arrest shouldn't affect Cavs sale

Posted: Wednesday, January 05, 2005

EAST LANSING, Mich. — The man buying the Cleveland Cavaliers said Tuesday he doesn't think a gambling-related arrest when he was in college will affect the deal.

Dan Gilbert was arrested in 1981 while a student at Michigan State. He was fined, given probation and ordered to do 100 hours of community service — but he has no permanent criminal record since the charges were dismissed. He qualified for a program that allows certain youthful offenders to have their records cleared.

Gilbert said the gambling involved a weekly football pool that he likened to a weekly poker game. He said that several students were involved and that he was one of the few arrested.

According to a story in the Lansing State Journal, Gilbert was arrested with three other students in 1981 on charges of operating a bookmaking ring at Michigan State that handled $114,000 in bets on football and basketball games.

Gilbert said Tuesday the pool was only related to football and that dollar amounts listed in media reports have been exaggerated.

''If this is relevant to the purchase of an NBA basketball team, maybe you guys can answer that,'' Gilbert said. ''If I was concerned, I wouldn't have gone through this process. No, I am not concerned.''

Gilbert, founder of the nation's largest online mortgage company, agreed to buy the Cavaliers for $375 million from Gordon Gund.

The deal is pending approval from the NBA.

Gilbert said he told the league about his arrest. He also said he has been personally investigated by nearly all 50 states as an officer of a mortgage lending institution.

He is chairman of Quicken Loans Inc., a $12 billion Web-based mortgage lender based near Detroit.

The NBA said Monday it was just beginning to review Gilbert's application.

Gilbert said he was disappointed so much attention has been focused on the gambling incident that occurred when he was a 19-year-old at Michigan State.

According to a Jan. 6, 1982, story in The State News, Michigan State's student newspaper, police said the ring began as a social event among eight to 12 friends, but quickly grew.

The State News reported at the time that bets typically ranged from $20-$50, some wagers were as much as $200, and one customer was more than $1,000 in debt.

Police said that's what brought the ring down. A frightened student went to police, who set up an undercover officer to pose as the student's father and arrange a meeting to pay the debt. The officer was shown the operation's books, and arrests followed soon afterward, catching the college students by surprise.

''To use today's phrasing, it was shock and awe on their part — that this was happening to them, that a police officer was there,'' said Kim Warren Eddie, former chief assistant prosecutor for Ingham County.

Eddie said he doesn't remember the names of the students involved, but remembers the case more than 20 years later for how it was uncovered.

Jeff Patzer, an assistant prosecutor at the time, told The State News in 1982: ''I think we scared the bejabbers out of them.''

Gilbert said he didn't want to go through a trial and that's why he chose to deal with the events the way he did, disposing of it in 60-90 days.

Gilbert said he would not discuss the episode after Tuesday's teleconference and was focused on the Cavaliers.

''I believe in the city of Cleveland,'' he said. ''I believe we can do great things together.''

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