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AG Koster Sues Fantasy Sports Operator For Fraud

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Attorney General Chris Koster today filed suit against Dustin Ashby and his company, Gridiron Fantasy Sports, headquartered in Alparetta, Georgia, for allegedly defrauding Missouri consumers by failing to pay out the cash and other prizes they had promised to the winning fantasy league owners.

Koster said Ashby ran the World Championship of Fantasy Football and the World Championship of Fantasy Baseball both in Missouri and throughout the country, operating from an office in Chesterfield, Missouri.  Participants in the fantasy football and baseball contests would pay entrance fees for a chance to win pre-set cash prizes.

Koster said prior to the start of the 2010 fantasy football season, the defendants promised to pay cash awards to up to 331 participants, totaling a minimum of $389,500, based on the performance of the individual fantasy teams.  For instance, the person whose team scored the most fantasy points in each league during the regular season was guaranteed a cash prize of $5,000, and there were up to 100 leagues, based on the number of participants.  At the end of the 2010 season, the defendants notified the winners, told them the amount they had won, and promised to pay by February 15, 2011.  The defendants even went on ESPN during Super Bowl XLV and presented the grand prize winner with an oversized check for $300,000, which was not fully honored.

While the investigation is ongoing, Koster has discovered that the defendants have failed to pay out at least $151,261 of the promised prize money.  Koster’s suit is alleging that the defendants were using the fantasy baseball entrance fees to pay the fantasy football winners and the football entrance fees to pay the baseball winners.  As a result, they could not guarantee prize-winning amounts, as they had done, since the payouts would be dependent on the number of participants.  The suit also alleges the defendants used some of the entrance fee money for other non-contest purposes, including paying off loans.

Koster is asking the court to issue preliminary and permanent injunctions prohibiting further violations of the law; to require the defendants to provide full restitution to victims and pay all court and investigative costs; and to require the defendant to pay the state a civil penalty and an amount equal to 10 percent of total restitution ordered.