"I really wanted to work this case," recalls Incampo. "Yeah. Oh, yeah. I wanted to work it bad. There was definitely something fishy going on there."
It appeared to be another white-collar crime, although when the detective first heard about it back in the summer of 1997, it wasn't quite ripe yet. So when one of the company's officers told him, "Wait just a little longer; we want to see how much money is involved," Incampo waited. A year later, the company officer returned.
The detective recalls the conversation: "He calls me. He says, 'We've done the audit.' I say, 'Fine; so how much is missing?' And he says, $250,000. And I say--I remember saying this to him--'Oh, shit.' I mean, these figures are jumping out at me; we're not talking chump change. We're talking big money.
"Especially for Little League."
Financial crimes can be complicated. Numbers can be manipulated, and there are no bodies to autopsy for clues. Yet as Incampo stared at the audit, the figures drew more sharply into focus and he became convinced that the crime had, in fact, occurred. He'd seen it before with bingo.
"Bingo is a cash business," he explains, "and when you get that much money floating around, people's brains just start to click off." In short, he says, "I wasn't about to close this case. I wanted it."
But this spring, Incampo did reluctantly close the case, and not with a bang, but with a whimper. No one was prosecuted, no one was jailed. No money was ever recovered. He was not the only one who walked away disappointed.
"It's kind of like a sellout," says Cary Romero, who until last year, had volunteered his time as a boardmember of Southwest Denver Little League for nine years, including two--1997 and 1998--as president. In fact, he says, part of the reason he quit last year after nearly a decade of service was over the unbalanced books. "I just didn't know if I could look the kids in the eye again," he says.
There aren't many businesses in this world where, given the same set of books, people can convincingly argue over whether piles of money might or might not exist. Colorado bingo, however, is one of them. This is the story of how $250,000 seems to have simply vanished.
Bingo used to be played in church basements to raise money for new hymnals, and Little League baseball was simply groups of kids showing up to field grounders in vacant parks. Now bingo is a $250 million yearly business in Colorado alone, and Little League spreads across the country like Wal-Mart and needs as much money to run as the major leagues.
Rocky Mountain News columnist Gene Amole remembers simpler times. He was corralled to head Southwest Denver Little League in its early days. It was 1967, the second year of the league's existence. "It was the worst year of my life," Amole recalls.
"They told me, 'We just want you for your name; people recognize you. You won't have to do anything.' But right away I was out there building snack shacks and dealing with parents in a way I'd never thought I'd have to--mostly defending myself. Once, another father and I had to escort an umpire off the field. They were going to lynch him. It was a painful experience at the time."
Despite all the headaches, Amole recalls things getting done. He convinced the principal of Mullen High School to let the league use a big empty field on school property for $1 a year; the Army Corps of Engineers leveled the space into five baseball diamonds for free. When players who lived on the other side of Bear Creek needed a way to get to the fields, a bridge was donated. During games, the league raised money for uniforms and equipment by selling food at the snack shack.
Some elements of Little League baseball never change, no matter what year the calender says it is. Today parents still get into fights while their boys play ball. But the league itself has grown up.
It all begins in Williamsport, Pennsylvania, home to Little League, Incorporated, the ultimate authority for the estimated 10,000 sanctioned Little League baseball games that are played on any given summer day. Headquarters oversees eight "regions" that span the globe. The United States is home to four of these regions, which roughly divide the country into quarters. Colorado is part of the western region, a thirteen-state jurisdiction run out of San Bernardino, California. Within each region are districts, of which Colorado currently has four, dividing the state into east, west, north and south. Each district is made up of leagues--generally about ten to fifteen of them per district. Finally, within the leagues are actual teams.
While the reach of Little League has spread, the number of kids playing Little League baseball seems to be dropping off. That doesn't necessarily mean fewer kids are interested in baseball, although the growth of sports such as soccer may be cutting into the pool of child athletes. But whereas Little League once had little competition, today there are dozens of rival baseball organizations, particularly in cities.
"Where I live, I could join six different baseball leagues," says Mike Duff, current president of Southwest Denver Little League. Still, he says, he decided his boys would play Little League for a common reason: "It's what I played when I grew up."
It's not a choice everyone is making, at least in Colorado. Lance VanAuken, director of media relations for Little League in Williamsport, claims that two-thirds of baseball-playing kids in this country still take their cuts and field balls in Little League. But in Colorado, that number is shrinking. Two years ago, 19,000 Colorado kids played in the baseball leagues sponsored by Little League. Last year there were a few more than 17,000. (The number of kids--mostly girls--playing in the state's Little League softball leagues has stayed constant.)
The trend--plus recent internal strife--seems to have hit Southwest Denver Little League particularly hard. The league, which encompasses an area roughly from 38th Avenue south to C-470, and Monaco Boulevard west to Kipling Boulevard, once claimed as many as seventy teams. Thus year, Duff says, the league is fielding only 25.
Still, it takes a lot of money to sustain so much organization and so many kids. And like everything else, it takes more and more money each year. "It's just like the cost of living," says VanAuken. "The price of everything has gone up."
Adds Terry Eldred, secretary for the league's western region, in San Bernardino: "Before, you used to be able to get so much donated. But equipment has become so expensive. Even fundraisers are more expensive to put on. And I remember when you could go to a city park and just play there. Now you have to pay for permits, lights, umpires."
Southwest Denver Little League is no exception. Duff says this year the league will pay about $13,000 for field permits. (Most games are played on the two fields at Federal Boulevard and 5th Avenue. Duff says the league used to play some games on Denver Public Schools fields until two years ago, when the school district raised the fee from 50 cents a night to $10 an hour.)
With the costs climbing every year, Southwest Denver Little League consistently has been forced to raise the fees it charges players to take the field. This year, kids twelve and under each were asked to pony up a $45 registration fee. (Not everyone pays the full amount; there are scholarships based on need.) For seventeen- and eighteen-year-olds, the fee is $100. And that's not including the additional $1 and $2 Denver Parks and Recreation fee (for non-city residents) or the $30 that every child is expected to come up with from the mandatory annual candy sale.
Indeed, in an informal survey conducted last year, Little League calculated that it cost about $150 to support one kid playing one year of baseball. When added up, VanAuken says, the amount of money that flows through Little League baseball teams across the country each year comes to about a half-billion dollars. "There is intense pressure to raise money," he says.
That's where bingo--the modern version of it, anyway--can help.
Debbie Lambrecht recalls her introduction to bingo in the 1950s. "I was born and raised in a good Catholic family," she says. "For us, that meant working bingo games in the basement of Enunciation Church and school, at 37th and Gilpin."
As time passed, the game remained a part of her life. In the 1970s, she and her husband volunteered to work at bingo games to raise money for her daughter's soccer league. Nine years ago Lambrecht put her accounting degree to work by starting her own business as a bingo book auditor.
These days, she says, the game she still follows is a far cry from the Enunciation basement--and if it's done properly, it can breathe substantial wealth into a nonprofit organization like Little League. "If they play two sessions a week, during prime time--Friday and Sunday nights--at a good bingo hall, these organizations can pull in $100,000 to $150,000 a year," she says. "That's net."
The changes in both Little League baseball and bingo have meant that the two institutions have become a natural for each other, and several baseball leagues across the state today rely on bingo to pay the bills.
Unlike many $250 million-a-year enterprises, the business of bingo in Colorado is conducted mostly in cash and mostly by volunteers. Lambrecht estimates that on a busy night, about $14,000 in one-, five-, ten- and twenty-dollar bills flows through the hands of volunteer bingo managers. That much cash can be a big temptation, and although the games are regulated by Secretary of State Vikki Buckley's office, there are still plenty of ways to play the system.
Take the game called Pickles. Pickles, also known as pull-tabs, are like instant-winner lotto tickets. (They used to be sold from old pickle jars, and the name stuck.) A player buys one ticket for $1 and peels back the front covering to reveal whether he has won a cash prize.
Nonprofit organizations make their money by buying the pull-tabs in large lots. For example, bingo groups buy a version of Pickles called Colorado Diamonds in lots of 4,440 tickets for $110. Like blocks of lottery tickets, the lots contain a certain number of winners, and winning tickets within the lot pay out a total of $3,792. That leaves a guaranteed profit margin of $538 ($4,440 in $1 Pickle sales, minus the prize money and the cost of the lot).
The easiest way to work the system is also the simplest.
Cash prizes awarded to Pickles players must be recorded and reported. Since he knows each lot contains so many winners, an unscrupulous games supervisor could score some easy money just by paying attention. For example, by watching his books closely, he could determine that $600 worth of winning tickets in a particular lot hadn't been sold and that only 400 pull-tabs remained of the lot. He could then buy all the tickets with the inside knowledge that he was guaranteed to win the $600 prizes--a quick $200 profit. "It happens," says Lambrecht. "It happens a lot."
Relatively loose state laws also provide enough opportunity for a less-than-honest bingo games manager to peel off a few dollars here and there.
Although a number of more sophisticated games of chance in Colorado have come to be known as bingo games--many of them are electronic, some look like slot machines--the actual game of bingo is pretty much the same as it always was. Players purchase a packet containing grids, usually for $6. As numbers are called out, the players try to fill an entire row. The first person to do so wins. (A typical prize these days is $1,500, the maximum amount permitted by state law. Bingo halls may choose to offer lower prizes, but by doing so they risk losing players looking to win the highest amount possible to other bingo halls that do offer the larger jackpot.)
Nonprofit organizations hosting bingo games hope to earn their money by selling more packets than the number it takes to cover the prize money. The organizations buy packets in lots of 1,500 for anywhere between $150 and $185. At $6 a packet, they need to sell 250 of them to raise the $1,500 prize money, and a few more to cover the cost of buying the lot from the supplier. After paying expenses--security and hall rental--the rest should be profit.
The easiest way to game the bingo system comes courtesy of a state bingo-law loophole. All sales of bingo packets must be recorded and reported to the secretary of state's office. But all an unscrupulous games manager has to do to make a profit is "lose" some packets. Say, for example, a games manager for a nonprofit sports league sells all 1,500 packets in a lot. In theory, he collects $9,000. But what if he sold 1,500 packets and only reported that he sold 1,200? That means $1,800 is "missing."
Fortunately, it's not quite that simple: The lots are tracked by serial number and reported to the secretary of state's office, so if any state inspectors came nosing around, the dishonest manager would have to come up with a reasonable explanation for the missing packets. In Colorado, though, that would be easy.
Maybe they got lost. Perhaps coffee was spilled on them and they were ruined. Some states get around this by requiring that the damaged tickets be kept to prove to state inspectors that nothing has been swiped; once that's established, the ruined tickets are destroyed. But in Colorado, the games manager's word is all an inspector needs.
"A lot of money can disappear that way," says Lambrecht. At the very least, the system can result in extremely loose accounting, with an organization appearing to handle a range of money rather than a specific amount.
According to a lawsuit filed recently in Denver District Court, Michael Sedillos is a selfless Little League hero. According to the same lawsuit, he is a ruthless bingo shark who deprived baseball-playing kids of hundreds of thousands of dollars.
Mike Duff is probably the one who first raised that question legally. Duff is a solid-looking guy who works as a maintenance man for an office complex south of Denver. He joined Southwest Denver Little League's board of directors in 1996. He explains why:
"I had two kids playing in the league then, fourteen and eleven. They'd been playing since the age of six, but I didn't like the direction of the board. The league seemed to be going downhill; a lot of things just weren't right. Parents were fighting in the stands--the police had to be called. Not often, but it happened. You know what they say: Get rid of the parents, and Little League would be great.
"Anyway, I decided I either had to put up or shut up."
Duff ran for the fifteen-member board and was elected. Soon after that, he was appointed to the position of assistant director of fundraising. "We usually have one major fundraiser during the season--a casino trip or candy sales," he says. "But the main way we raise money is bingo."
By the time Duff decided to get his hands dirty running it, the league had pretty much become synonymous with the Sedillos family: Mike, a single Denver Public Schools teacher; his father and mother, Ray and Linda; and his sister, Michelle.
According to Cary Romero, the league's ex-president, one or another of the family had run Southwest Denver Little League for more than a dozen years. Ray had headed the organization for several years, after which Mike took over the reins. The whole family helped out. Ray and Mike ran the bingo games, his wife coached teams, and his sister ran her own baseball umpiring company, which the Southwest league hired to officiate its games.
"As new people came on, nobody questioned it," Romero says. "They just assumed that's the way things were always done."
By the time Duff was elected to the league board, Mike Sedillos was preparing to move on. Since Duff already had his bingo-games manager's license--his wife had been a high school volleyball coach, and they had helped raise money for the team with bingo--he soon began running games for Southwest Denver Little League.
Everything moved along smoothly until one night in August 1997, when, as he was closing the books, he noticed they didn't balance. That evening, after doing a quick review, Duff filed a report with the Lakewood Police Department claiming that, based on his research, $1,700 was missing from games held in the past month. The police report ended up on Detective Incampo's desk.
The missing money was significant to the organization, because according to records filed at the secretary of state's office, Southwest Denver Little League had consistently lost money hosting bingo games in each of the past several years--$35,000 in the red in 1992 alone. (Given such a record, it is unclear why the league continued to host the games, although during the same period it did make some money selling pull-tabs--which, technically, are impossible to lose money on.)
His suspicions aroused, Duff convinced the league's board to conduct an audit. On the recommendation of a state bingo inspector called in to look at the case, the league hired Lambrecht to do it. Later, Duff spoke to Incampo to keep him up to date.
"I was glad they were doing the audit," the detective recalls, "which I recommend for anything, and especially bingo. That stuff generates a lot of money."
Lambrecht dug into the project. She remembers getting the league's bingo books from 1993 to 1997--"a package as big as about four or five phone books." While technically simple--using the serial numbers of the lots of 1,500 packets sold and multiplying by the $6 cost of each packet, she calculated how much money the league should have taken in versus what it did--the process was laborious. Lambrecht estimates she spent about sixty hours poring over the financial records. She finished the bingo portion of the audit in June 1998. Her figures showed a $212,000 gap between what Southwest Denver Little League should have earned on its bingo games and what it did earn.
Within days, Lambrecht sat down with Duff, Romero, two state bingo inspectors and Incampo to go over the findings. Incampo recalls, "I'm looking, and these figures are jumping out at me. Then they tell me about the Sedillos family running the league, and I'm saying, 'Oh, great--it's a family affair.'"
Since Incampo was the cop, he directed the show. He ordered the state inspectors to begin checking with bingo suppliers to verify Lambrecht's numbers. Duff and Romero, meanwhile, were instructed to find witnesses for Incampo to interview who would testify that they saw the Sedillos family handle the bingo money. The meeting broke up.
"Everybody's supposed to do their thing," recalls Incampo. "But people sat on their butts. People procrastinated. So after awhile, I said, 'The heck with this thing,' and I put it aside."
Some of the procrastination on the Southwest Denver Little League case was understandable: Duff found one parent who claimed to have seen Ray Sedillos pocket some bingo money. But what did that prove? After all, as games manager, it was his responsibility to handle the money. (Asked by Westword about any missing bingo money, Ray Sedillos said, "I don't know anything about it.")
Yet some of the obstruction was official. In fact, it was more or less ordered by Secretary of State Vikki Buckley's office. Jerry Galindo, one of the state bingo inspectors who was assigned to work the case, recalls getting the message.
"We had gotten together and met at Incampo's office, and it was agreed that he would take charge. He asked Patrick [Ryan, another bingo inspector] and me to do some checking into the Sedilloses' lifestyle--had there been an increase in the amount of money, things like that. But when we got back to the [secretary of state's] office and explained what we were going to do, we were told no, that we were just to provide the minimum public records [to Incampo] and not really assist in the investigation."
"That was kind of a surprise," Galindo continues. "I mean, the state statute requires me to assist [police]; in fact, our job description says we're supposed to assist in any active investigation that comes down, and here Clarice [Clinton-Davis, the office's lead bingo investigator] wouldn't really allow me to do the investigation."
Clinton-Davis detailed the instructions not to help Incampo in a memo, which Galindo, who recently quit the secretary of state's office to run his own bingo hall, promptly circulated to Lambrecht, Duff and Incampo. "I made sure that people got copies," he explains, "because I didn't want to look like a fool just sitting there doing nothing."
Sam Riddle, the $10,000-a-month special consultant to Buckley, says that by actively helping Incampo investigate the disappearance of bingo money, the inspectors would have been stepping outside of their job descriptions, which he describes more as ensuring compliance with, rather than enforcing violations of, bingo laws. "We're not going to just give the Lakewood Police Department an investigator," he says.
Riddle explains that his investigators in the past have pursued bingo cases more aggressively than they should have. "They're not an appendage of the police, no matter if they're wannabe cops acting like junior Gestapo agents," he says of his office's own inspectors. "And if any of those little fuckers have a problem with it, they can get with me on it."
The investigation into Southwest Denver Little League wasn't the first time that Buckley made a decision in favor of the bingo industry--which almost exclusively has funded her two election campaigns--over her own inspectors. Ever since being elected secretary of state in 1994, she has seemed reluctant to allow her investigators to build cases against those who seemed to be using bingo to misappropriate the proceeds; at times, her policy has allowed the games to continue, even with hints of shady doings.
"Investigation reports just vanish once she gets ahold of them," says one person familiar with the office. Examples abound of cases in which state bingo inspectors have uncovered what seemed to be compelling evidence of wrongdoing against games managers, only to watch them evaporate once the secretary of state became involved ("The Buckley Stops Here," September 17, 1998).
In one three-year-old case, two members of the Doyle family--Kevin Doyle and his father, Homer--sat on the boards of a handful of charitable organizations that ran bingo games to raise money. But once the money was collected, it all seemed to be donated to other Doyle-controlled organizations. Two state inspectors were looking into the complex network of apparent self-dealing when Buckley pulled them off the case. No one else was assigned to look into the case; the Doyles, who were never charged with any wrongdoing, continue to run numerous bingo games throughout the city ("Buy the Number," March 20, 1997, and "In a Pickle," August 7, 1997). In an interview with Westword two years ago, Buckley said her office had begun an investigation into the Doyle family. Today, however, investigators say that inquiry has died.
A year ago, an almost identical operation revolving around a nonprofit agency called Missionary Flights came to the attention of inspectors. Tens of thousands of dollars raised through bingo games crisscrossed between it and three other organizations sharing the same group of games managers. Yet Buckley discouraged her inspectors from pursuing the case. Today, all of the people involved are still running bingo games; no charges were ever brought (although one games manager gave up his lease voluntarily).
While the secretary of state's office was standing down on the Southwest Denver Little League case, Lambrecht was completing the second part of her audit, this time of the league's Pickle books. Her findings: another $30,000-plus missing over the four-year period--for a grand total of nearly $250,000 that had vanished on Sedillos's watch.
So it came as somewhat of a surprise when, in May 1998, Mike Sedillos filed a lawsuit against the Southwest Denver Little League. In it, he claimed that during his time leading the organization, he had injected more than $33,000 of his own money to keep the league afloat. Now that he was leaving the organization, he wanted it back, and the league was balking at paying the bill.
As Sedillos explained in the filing, "the annual registration fee to be paid by each team member to the league was insufficient to meet all expected expenses of the teams and the league...Fund raising efforts of the league (i.e., bingo) were held, but were insufficient to meet all expenses of the league...To sustain the league during this period of time [Sedillos] would lend or advance the league monies, when needed, to meet the on-going expenses."
Within a few weeks, the league had hired a lawyer and fired back with its own account of events. Not only was there some question about how much money the league owed its former president (everyone agrees he put some of his own money to help out; many volunteers do), but Southwest Denver Little League had its own beef with the Sedillos family. Namely, that they swiped more than $200,000 over four years of bingo supervision.
However, as the case unfolded this spring, it soon become apparent that the league had the weaker case. Sedillos had kept receipts showing that he had, in fact, lent money to the league. And although some dispute remained over how much the league had repaid him, league officials were forced to concede that their record-keeping had been less than meticulous.
As far as its counter-claims went, the only thing the league had against Sedillos was the apparent disappearance of a quarter-million dollars while he and his family exercised control over the league and its finances. Sedillos referred Westword's questions about the dispute to his lawyer, Steve Goldstein, who did not return phone calls. But in legal filings, Sedillos simply claimed that the missing money never existed, a stance that proved to be defense enough.
"I felt we couldn't prove anything," recalls Neal Dunning, the league's lawyer. "I think we could prove that money was missing. We just couldn't show who took it. It was one of those situations where you know that something is wrong, something is amiss--you just aren't sure what."
The case of Mike Sedillos v. Southwest Denver Little League was settled a few weeks ago. For all intents and purposes, Sedillos won. As part of the agreement, the Little League agreed to pay him $22,000 to cover the expenses for running the league that he took out of his own pocket. Although the league's insurance will cover some of the costs, Duff says that Southwest Denver Little League will have to come up with about $8,200 more in cash.
The league also agreed to drop its claims against Sedillos regarding any missing bingo money. Finally, the two sides agreed never to speak badly of each other in public.
Cary Romero, the former president of Southwest Denver Little League, says that for a time, the dispute split the baseball organization, with parents choosing sides based on who they believed more. He estimates that about half a dozen active parents simply quit over the quarrel.
Still, as the story of the missing money fades, there seems to be a happy ending for most of the people involved. After he left Southwest Denver Little League, Sedillos was, in effect, promoted. He now administers all of Colorado's Division 5 Little League, a geographic area that spreads south along the foothills from Denver to Colorado Springs. Neither Sedillos, nor any member of his family, was ever charged with any crime.
The really good news, though, is that, unlike just a couple of years back, when it was losing as much as $2,000 a month on its bingo games, Southwest Denver Little League is actually showing a profit. "Now we're making $1,000 a week from bingo," says Duff. "And that's net."
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