Washington Nationals Sue Crime Insurer Over Player’s Lie About Age

By | August 7, 2013

Major League Baseball’s Washington Nationals sued an insurance company for $1 million for declining to provide crime insurance coverage for an alleged fraud scheme involving a team executive linked to the signing of a player who was four years older than he claimed.

The Westchester Fire Insurance Co., of Philadelphia, a unit of ACE Group, denied the team’s claim and “repeatedly rebuffed the Nationals’ good faith effort to resolve this coverage dispute,” according to the complaint.

The disagreement turns on the Nationals payment in 2006 of a $1.4 million signing bonus to a prospect, 16-year-old Esmailyn Gonzalez, who turned out to be 20-year-old Carlos Alvarez Lugo.

Alvarez, in a sworn statement about the circumstances of the bonus, acknowledged his fraud and said that he kicked back $300,000 to Jose Rijo, who at the time was an assistant to the Nationals’ general manager, according to the complaint. The case was transferred today to U.S. District Court in Washington from Superior Court of the District of Columbia.

Had they known Alvarez’s true age and identity at the time, the Nationals likely would not have paid any bonus at all, team lawyers wrote. “The $1.4 million signing bonus thus represented a complete loss resulting from the dishonesty, theft and fraud” by Rijo, Alvarez and another former employee of the Nationals’ front office, they wrote.

Employee Dishonesty

The Nationals reported the incident to Westchester as employee dishonesty falling under the terms of a $1 million commercial crime insurance policy, according to the suit.

Carla Ferrara, a spokeswoman for Westchester’s parent, ACE, declined to comment on the complaint.

John Dever, a spokesman for the Nationals, said he had no contact information for Alvarez or Rijo, who pitched 14 years in the Major Leagues, mostly with the Cincinnati Reds.

Rijo maintained his innocence in a 2011 Washington Post article, telling the newspaper he never received money from Alvarez and didn’t know him before the Nationals signed him.

The case is Washington Nationals v. Westchester Fire Insurance Co., 13-cv-1214, U.S. District Court, District of Columbia (Washington).

Editors: Peter Blumberg, Mary Romano

Latest Comments

  • August 15, 2013 at 12:06 pm
    Michael A. Doering II says:
    Embezzlement is still covered - that's what employee dishonesty coverage is for. Whether you're taking from the till or cashing company checks for fraudulent expenses, crime c... read more
  • August 8, 2013 at 8:59 pm
    james says:
    Jose Rijo at the time was an ASSISTANT to the Nationals’ general manager. In other words, an employee with no authority. How does that make the team complicit?
  • August 8, 2013 at 2:46 pm
    No Doubt says:
    At the end of the day, the player wasn't whom he was supposed to be and employees of the Nationals were in on the plot for financial gain. I think that is fraud and embezzleme... read more
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