Prosecutors drop sports betting charges against ISU athletes

Prosecutors in Story County are dropping charges against current and former Iowa State University athletes charged with sports betting because Iowa investigators “exceeded” the permitted use of geofencing software, according to “newly discovered evidence.”

The state’s top public safety official on Friday said he was disappointed by that decision, saying lawyers repeatedly assured investigators the geofencing they were employing in the investigation was legal.

According to the motions to dismiss, filed Friday by the Story County Attorney’s Office, athletes Isaiah Lee, Jirehl Brock, Paniro Johnson and Eyioma Uwazurike, all charged in 2023, obtained the new evidence through an open records request to the Iowa Racing and Gaming Commission.

The evidence showed GeoComply, provider of the product used in the investigations, believed the Iowa Division of Criminal Investigation “exceeded the scope of its permitted use in using the Kibana product in October of 2023,” acoording to the motion from Assistant Story County Attorney Benjamin Matchan.

DCI’s use of the product was revoked Jan. 24 of this year, due to concerns about the division’s use, the motion noted.

The prosecutors investigated the allegations as soon as they received the defense attorneys’ information and confirmed them to be accurate, according to the motion.

Matchan, in the motions, said he had attempted to contact GeoComply through counsel, but the company had failed to respond.

“Due to this newly discovered evidence, the state no longer believes further prosecution in this matter is in the interests of justice,” Matchan said.

The costs of the cases will be assessed to the prosecution.

Prosecutors asked the charges be dismissed “with prejudice,” meaning they can’t be refiled later. The dismissal does not affect betting sanctions imposed by the NCAA, which governs collegiate sports.

Stephan Bayens, commissioner of the Iowa Department of Public Safety, said in a statement he found the dismissal of the four pending cases “disappointing.”

“Despite their decision, they repeatedly shared with us their belief that the Division of Criminal Investigation’s actions were legal,” Bayens said.

To comply with Iowa law, sportsbooks contracted with GeoComply to facilitate geolocation and provide analytical software that allows aggregate data to be filtered.

“GeoComply specifically trained DCI agents on how to use the software and participated in ongoing meetings regarding its use,” he said. “Agents were trained to review anonymized data points across Iowa for anomalies that called into question regulatory compliance or suggested criminal activity.

“During a review of anonymous data points, anomalies were observed at athletic facilities that only individuals associated with NCAA-sanctioned sports teams had access,” Bayens stated. “This was concerning because sportsbooks must seek to prohibit sports wagering by coaches, athletic trainers and players as required by Iowa law.”

Investigators determined many account holders lacked any real connection to the places flagged by the data, “strongly suggesting fraudulent activity or identity theft.” The department investigated only those accounts, Bayens said.

Agents conferred with legal experts throughout the investigation and ultimately applied for search warrants, approved by judges, to seize digital devices controlling those accounts.

Bayens said the department’s investigations were presented to prosecutors, who then made charging decisions.

The investigation uncovered concerns of a “seismic magnitude” within Iowa’s sports gambling industry, Bayens said in the statement. In 2023 alone, $2.4 billion dollars in sports bets were placed in Iowa, with 91 percent of those being placed online.

“In the eleven months preceding this investigation, sportsbooks in Iowa closed 28,554 sports betting accounts,” he said. “In the eleven months since the investigation, they closed 82,559 accounts.”

Bayens said throughout the investigation and subsequent prosecution, his staff reviewed their actions and “fully stand behind the investigation and the agents who did the work. I want to thank them and their families for their service to Iowa.”

A defense attorney for two athletes filed motions in January to dismiss their charges, arguing the use of geofencing amounted to a “warrantless search” that invaded students’ privacy.

The motions by Van M. Plumb, a Des Moines lawyer, says a deposition in January by Iowa DCI Special Agent Brian Sanger revealed new information about a probe that led to criminal charges against 25 people, including student-athletes at ISU and the University of Iowa.

“Special Agent Brian Sanger was given access to a tool that can invade people’s privacy,” Plumb wrote.

The motion asked the court to force state agencies to turn over documents and other materials as part of the ongoing criminal case against former ISU defensive lineman Lee, who left the university days after being accused in August of wagering against his team.

Plumb also is the lawyer for Uwazurike, a former Cyclone football player now playing for the Denver Broncos.

Plumb said Sanger set up a virtual boundary, or geofence, around an University of Iowa residence hall. The software allowed Sanger to see if online betting applications were opened in the dorm and the account numbers in use, the motion stated.

When Sanger asked his DCI supervisors if he could continue the investigation, they said no, according to the motion.

Sanger then decided to focus on UI athletic practice facilities, which are restricted to athletes, coaches and support personnel, in Iowa City. People in these positions generally are prohibited from wagering on sports.

Special Agent Troy Nelson and Assistant Director Dave Jobes gave Sanger permission to continue the investigation at those facilities, the motion stated.

A previous motion filed by Christopher Sandy, an lawyer for Johnson, an ISU wrestler, who also is charged with identity theft, stated DCI Special Agency Mark Ludwick said in a January deposition he felt misled by his supervisors.

According to the motion, DCI supervisors initially said the sports betting probe was focused on sportsbooks, including FanDuel and Draft Kings, but the criminal charges were filed against student-athletes.

Uwazurike was suspended for the 2023 Broncos season after charges were filed against him, which could lead to civil actions by him and possibly others against the state.