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Archive for Thursday, January 13, 2011

Kassie Liebsch pleads guilty to wire fraud, faces up to 20 years in prison in KU ticket scandal

January 13, 2011, 8:47 a.m. Updated January 13, 2011, 2:26 p.m.

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Kassie Liebsch

Kassie Liebsch

— The former head of the ticket office at Kansas Athletics Inc. pleaded guilty Thursday to taking part in a scheme to steal at least $2 million worth of athletics tickets, to reap a total of $5 million from their sales and to elude payment of taxes on the transactions.

And she told a federal judge that she’d accept spending up to 20 years in prison for her five years’ worth of crimes, condensed in an indictment to five words: conspiracy to commit wire fraud.

“From approximately age 22 to age 27, Kassie Liebsch made decisions and took actions which she now deeply regrets,” said David Bell, her attorney, after the hearing. “By pleading guilty today in court, she has accepted full responsibility for her decisions and actions. She looks forward to moving on to a new chapter in her life.”

As part of a plea agreement accepted and approved by U.S. District Judge Wesley Brown, Liebsch, now 28, also must repay up to as much as $2 million — either on her own or jointly with other codefendants in the case, should they be found guilty. She admitted to receiving $100,000 in illegal proceeds from the sale of tickets, and already has forfeited a 2008 Toyota Camry she’d purchased with cash received as part of the scheme.

Liebsch’s sentencing is set for March 30.

With federal agents looking on from the gallery, Liebsch also promised to cooperate with prosecutors in their investigation and prosecution of others said to be involved in the crimes. In exchange, prosecutors agreed to recommend a reduced sentence.

Rodney Jones, a former assistant athletics director in charge of KU’s Williams Educational Fund, also is charged with conspiracy to commit wire fraud and is scheduled to plead guilty at 10:30 a.m. Friday, also before Brown in U.S. District Court in Wichita.

Others charged are Charlette Blubaugh, who preceded Liebsch as leader of the ticket office; Blubaugh’s husband, Thomas Blubaugh, who served as a paid consultant to the athletics department; and Ben Kirtland, who had been Jones’ boss as associate athletics director for development.

The Blubaughs and Kirtland are scheduled to stand trial beginning Feb. 15, although Kirtland is seeking a delay to give his attorney at least 30 additional days to review evidence: nine boxes of documents provided by KU, plus disks containing 12,000 pages of e-mails involving Kirtland and another 50,000 e-mails involving other alleged co-conspirators.

“Counsel would suggest that the charges in this case are unusual, if not novel,” attorney Robin Fowler wrote, in his request for a delay.

Brown has not yet ruled on Kirtland’s latest request — he had rejected an earlier one on procedural grounds — but the judge did acknowledge Thursday that the case against Liebsch involved an oddity: While Liebsch arrived at the hearing facing up to 30 years in prison for conspiracy to commit wire fraud, such a sentence would presume that the case had involved a financial institution.

“KU is not a financial institution,” he told attorneys, ruling that the maximum sentence therefore would be reduced to 20 years in prison.

Richard Hathaway, assistant U.S. attorney, noted that other portions of the case involved having ticket brokers write checks to cash at out-of-state banks so that the money could be “given to intermediaries to give back to conspirators in Kansas.”

Earlier in the hearing, Brown had acknowledged the complicated nature of the conspiracy, instructing Hathaway to describe the facts of the case slowly and deliberately.

“It’s quite a caper,” Brown said.

Specifically, Hathaway said:

• Liebsch graduated from KU in 2005, and was hired by Charlette Blubaugh as a systems analyst in the ticket office, with responsibilities to serve as a liaison between the ticket office and about 10 development officers, including Jones and Kirtland.

• Liebsch received requests for tickets from Jones and Kirtland, and originally sought permission from Charlette Blubaugh before filling them — until Charlette Blubaugh told her that a group of tickets had been “separated” for the pair and that Liebsch should “never tell Rodney and Ben ‘no’ regarding a request for tickets.”

• In 2005, Liebsch began receiving cash from Jones, and received instructions from him how to convert cash into money orders in amounts that would allow for avoidance of currency reporting requirements.

• Liebsch joined the conspiracy, knowing that tickets were being taken for sale to third parties, in violation of university policies; accepting cash from such sales; and engaging in a phone conversation with Charlette Blubaugh, Kirtland and others that included Charlette Blubaugh discussing plans to manipulate the department’s computer system before responding to requests from law enforcement regarding ticket assignments.

While the ticket scheme is said to have started in 2005, its existence became exposed early last year. Jones had been placed on administrative leave, Charlette Blubaugh had resigned to take another job in Oklahoma, and federal agents had been asking questions within the athletics department. KU announced in March that it was conducting its own investigation, while federal authorities were pursuing their own.

KU’s internal report, released in May, would identify Jones, the Blubaughs, Kirtland and Jones as conspirators. Two other former department employees — Brandon Simmons and Jason Jeffries — also were named in the KU report, a document that included financial details about more than 20,000 tickets for regular-season football and basketball games that had been improperly diverted for conspirators’ personal gain.

Liebsch had been cited in the report as having helped expose the scheme. Only later, when news of the federal indictments was released Nov. 18, did Liebsch resign from Kansas Athletics.

Simmons and Jeffries already have pleaded guilty in federal court to failing to notify authorities about the scheme, and now are cooperating with prosecutors and awaiting sentencing.

As the scandal unfolded, Lew Perkins announced in June that he would resign as athletics director at the end of the 2010-11 school year. By September, however, Chancellor Bernadette Gray-Little had accepted Perkins’ departure “effective immediately,” a full year ahead of schedule.

In the plea agreement, Liebsch said she and her co-defendant misled Perkins into believing there was a computer system in place to prevent tickets from being stolen, converted or taken by fraud.

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Comments

Grump 3 years, 3 months ago

I wonder who the tickets were sold to? The purchasers must have known, or had reason to know, the tickets were stolen? The tickets must have been very expensive. Who could afford them? Will the people who purchased obviously stolen tickets be charged?

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wprop 3 years, 3 months ago

Brandon Macneill Perkins' son-in-law (assoiate AD)passed out tickets for Lew.....He is now at Tulane....the Pres. of Tulane in from, you guessed it, U Conn. Where does Lew's doughter work? These people are clustering the tax payers and allums big time

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ghawke 3 years, 3 months ago

This is such a kick in groin to all the "old" KU fans who were kicked out of their season ticket seats by Lew's regime...to all the faculty and alums who have to sit in the nose-bleed section of the Fieldhouse...to all the students who camp out and spend hours waiting in line for a seat. When I read this stuff, I get so angry I feel like Big Lew and his cronies (many of who are are still employed in top KU positions) need to face some kind of punishment. At best, this is criminal negligence on their part. When Lew was hired, Chancellor Heminway decided to scrap integrity for money. This is the result. The positives and negatives of any organization can be attributed, directly, to the top people in that organization. I'm a huge sports fan but I'm less in love with KU athletics after this!

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onceajhawkalwaysajhawk 3 years, 3 months ago

Is Moringstar not indicted because he isn't a ku employee?? You would think that at least the FEDS / IRS would be on his tail for the cash he supposed to have taken..

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Lana Christie-Hayes 3 years, 3 months ago

Just for the record everyone.... it says "faces UP TO 20 years in prison." It doesn't say that IS the sentence. That is yet to be determined! My guess is that it will be more like 3-5 years and then a LONG LONG LONG parole... because there will be restitution that there is likely no way she will ever be able to pay back in the course of her lifetime. Personally, I would love to see the book thrown at ALL of them. Regardless of what other sentences have been handed down to other offenders in other cases and jurisdictions. This one was in the backyard of the town I was born and raised in and love! It just sickens me that these greedy A-holes had to use the successes of KU Athletics to puff up their own pockets. Lord knows they were probably being paid a pretty nice salary already. GREEDY, DIRTY, B____tards!! I'm just glad that all of this finally came to light and that there has been a major sweep of the KU Athletics Dept. Rock Chalk Jayhawk.. GO KU !!!!!

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4everahawk 3 years, 3 months ago

xclusive85: In 2002 there were 6 associate ADs and a couple of assistant ADs. Granted, the department has grown, but the number of athletes and coaches didn't increase that much. The only job responsibilities that increased were those of the support staff and coaches who worked for each program/sport. Support staff in offices and coaches had more paperwork due to changes in recruitment and compliance, maintenance/custodial staff had more areas/buildings to clean/maintain, but the number of people hired to do those jobs didn't increase. An increase of 10 associate ADs and several assistant ADs to 'oversee' the support staff still doesn't make sense. Believe it's apparent that all those upper echelon staff weren't doing a very good job of overseeing their assigned offices. Actually it was some of the upper echelon who were committing the crimes!

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opobserver 3 years, 3 months ago

Maracas - Couldn't agree more! And don't you also think it is odd that the ringleader (RJ) is trying to cut a deal? Heard he's been spending the past couple of months stashing his dough for later.

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Kontum1972 3 years, 3 months ago

WELL IT LOOK LIKE SHE DIDNT MISS A MEAL...MB THAT PRISON CHOW WILL HELP OUT.

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LHS1980 3 years, 3 months ago

enjoy your new roommates Kassie, I'm sure they will enjoy you!!

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Floyd Craig 3 years, 3 months ago

well she was a snob while working there but she did what she was told to true she should have told some one but who could she have told I bet lew knew alot about what was going on why did he leave sooner then he said he would is it a deal the made with him but still paying for leaveing ???? oh I dont care abut spe;; check if you cant understand this then dont read it

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ralphralph 3 years, 3 months ago

I join the call for "mugshots.

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ralphralph 3 years, 3 months ago

I join the call for "mugshots.

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sherbert 3 years, 3 months ago

I wonder if the court takes into account that this young woman was brought into this when she accepted the job. This was probably her first real job, and an exciting one, in most young peoples eyes. They showed her that this is how it's done here, and even though she probably realized at some point that it was illegal, it's how it's done and how she was trained to do the job. She probably thought it was how the department was run for a long time. I think this should be taken into consideration. It was much bigger than her and she was innocently pulled into it. I don't know her at all, but this is what it sounds like.

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wysiwyg69 3 years, 3 months ago

They put the "pretty picture" in to tease all of the pretty girls in prison.

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JustNoticed 3 years, 3 months ago

“KU is not a financial institution,” he told attorneys ..." Very funny. He must be thinking of the good old days.

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Maracas 3 years, 3 months ago

Nothing would make me happier than to see Rodney Jones go down hard. That man is a huge wart on society's bum.

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Aiko 3 years, 3 months ago

Alceste, do you have a link that will show her mugshot? Please send it if you do.. thnx

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Alceste 3 years, 3 months ago

And, now, at 6:18am, Friday, January 14, 2010 Liebsch's pretty picture is on the front page of the on line edition. Why not post her mug shot, please? LJWorld.com posts the mug shots of the "common" criminal. Show us the despair and regret which must surely exist in the photograph taken by the authorities following her arrest, please.

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Alceste 3 years, 3 months ago

Funny how Liebsch's photo is all dolled up and the actual mug shot taken when she was booked is never used. In fact, it's not been used on any of these arrogant little twits involved in this matter.

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opobserver 3 years, 3 months ago

A Lawrence woman got 8 yrs in fed. today for an ebay sceme selling stolen tools. I am sure it was not a million dollar scheme like this.....I hope Jones doesn;t get off with less than that. Maybe white collar crime has different rules. Don't know. We will have to wait and see.

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opobserver 3 years, 3 months ago

I find it interesting that Jones is pleading a deal when he is supposedly the ringleader. Hmmm?

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Andrea Hoag 3 years, 3 months ago

I can't help but feel a little bit sorry for Ms. Liebsch given how young she is.

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4everahawk 3 years, 3 months ago

Go to kuathletics.com, inside athletics, then directory. Some of these positions were recently created and some of the staff recently promoted to associate ADs. I know this to be true. As a matter of fact, Nicole, chief of staff, is now an associate AD, but I don't believe it has been changed on the directory. It's a case of very high ranking, highly paid staff 'in charge of' others who actually do the work. Also true.

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xclusive85 3 years, 3 months ago

Well, I'm not saying that we could not do with less than 16 associate athletics directors, but the department has gotten larger. I looked at another well respected university's employee list and found 19 associate athletics directors. Here is a link.

http://www.und.com/school-bio/staff-directory-07.html

Now, I am not doubting your numbers, but where did you get your info from?

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4everahawk 3 years, 3 months ago

There are now 16...SIXTEEN...associate athletics directors currently in athletics. Prior to Lew, there were 4 positions that highly ranked and perhaps 6 or 7 assistant athletics directors. That was back when those positions actually meant something and had some relevance. The people in those positions earned those top spots, especially the associate ADs. Lew made sure that he promoted all his hires to the highest paid positions and created positions if one didn't exist. He created new titles and placed people (some from within) into those jobs. It is believed by some that he made sure he took care of his 'people' before he left. Hopefully the new AD will see that athletics is completely top heavy and that most of those positions have few duties and could be eliminated. That alone would save at least a million/year in salaries. It will be interesting to see how the next few months play out.

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oneeye_wilbur 3 years, 3 months ago

And Lew Perkins knew nothing of this, not any part of it? Gosh, that's hard to believe. Even old OEW could have figured that math out. It's just like weighing a bottle of booze. Empty bottle weighs so much. Weigh the bottle deduct the bottle weight. Figure the ounces gone and multiply those by the expected return.

KU needs to have a different system for ticket printing as well. Those dolts at the AD department are too enamored in their titles and positions to really care about running an efficient, honest operation.

And what is an "associate athletics director for development:" man that is a long name on a letterhead. or maybe it was "redevelopment:.

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gphawk89 3 years, 3 months ago

"Liebsch made decisions and took actions which she now deeply regrets"

Does she really, truly, deeply regret her actions? Or does she just regret getting caught? Lacking any investigation, would she still be stealing and selling tickets today? If so, then the regret is not all that deep.

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blindrabbit 3 years, 3 months ago

What is the latest "skinny" on others (not KUAD employees) that have been mentioned in connection with the ticket scandal story. Keep hearing about "other shoes to fall", but that's kind of a old story. Maybe waiting for BB season to be over!

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olddognewtrix 3 years, 3 months ago

So, when she "cooperates" with the prosecutors to try and get their help at sentencing time, one wonders what other person or persons will possibly end up being accused of fraud.

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olddognewtrix 3 years, 3 months ago

So, when she "cooperates" with the prosecutors to try and get their help at sentencing time, one wonders what other person or persons will possibly end up being accused of fraud.

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billybob1 3 years, 3 months ago

In reality these 'defendants' are dropping like flies because they do not have the where-with-all to fight the government. I am not sure we will ever know exactly what happened because those who have plead will say anything to reduce their sentence. The government never charged these people with the only obvious crime they could have committed ... tax evasion. The stealing of tickets is a state case. It will be interesting how this plays out for the three remaining hold-outs.

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Kontum1972 3 years, 3 months ago

SO IS SHE GOING TO PAY BACK ALL THE MONEY...MB BY PUTTING IT ON HER MASTER CARD...OBTW..WHEN DOES IRS GET INVOLVED IN ALL OF THIS?

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sad_lawrencian 3 years, 3 months ago

So happy I graduated from Wichita State and not KU! This means I won't be associated with a university that has all these problems. Rah, Rah, Wichita!

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Mkultra 3 years, 3 months ago

Oh now it says 30th perhaps it was changed or I read it wrong but it is still during the Tournament haha

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Mkultra 3 years, 3 months ago

March 20th is a Sunday and during the NCAA tournament how ironic.

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TheRob 3 years, 3 months ago

This is from the U.S. Attorney's office. Like the others, I'm sure she thought she wouldn't get caught.

Liebsch, who started as a freshman at KU in the fall of 2001, was hired as a student worker at the Kansas Athletics Ticket Office. She answered phones, helped customers, processed mail and took orders for tickets to athletic events. When she graduated in 2005, co-defendant and Associate Athletic Director Charlette Fay Blubaugh hired her as a systems analyst at a salary of $30,000 a year. In the course of her duties, Liebsch worked with co-defendants Rodney Jones and Ben Kirtland, both of whom were employed by the Williams Educational Fund, the fund-raising arm of KU Athletics. Upon becoming a systems analyst in 2005, Liebsch received requests for tickets to athletic events from Jones and Kirtland. At first, she sought Blubaugh's approval before providing the tickets. Then Blubaugh told Liebsch she had set aside a group of tickets for the Williams Educational Fund and Liebsch no longer needed to ask permission. Blubaugh told Liebsch "never tell Rodney and Ben no" when they asked for tickets. Sometime in 2005, Jones began giving Liebsch cash. He showed her how to convert the cash to money orders in amounts low enough to avoid currency reporting requirements. Rather than alerting athletic officials to the scheme, Jones joined the conspiracy. She continued to provide tickets to Jones, Kirtland and others, knowing that some or all of the tickets would be sold to third parties in violation of university policy. She continued accepting money from Jones that she knew came from the proceeds of tickets being sold in violation of university policy. She took part in phone conversations with Charlotte Blubaugh and Kirtland in which Kirtland said he had received money from Jones and Blubaugh talked about making changes to the ticket computer system before responding to a law enforcement request for information on ticket assignments. Liebsch used some of the cash she got from Jones to make payments on a 2008 Toyota Camry. In addition to diverting tickets, the conspirators misled the Director of Athletics to believe that a computer system was in place to prevent tickets from being stolen, converted or taken by fraud.

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John Spencer 3 years, 3 months ago

JK, in the last paragraph.

both pleaded guilty to pleaded guilty to committing misprision

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jcphawk 3 years, 3 months ago

She hasn't been sentenced yet. They are just saying that she could receive up to 20 years. She'll get much less for cooperating.

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yankeevet 3 years, 3 months ago

Such a young greedy woman; well; so much for her career...........

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Richard Payton 3 years, 3 months ago

Tom Delay only received 3 years for wire fraud. Same crime but not same amount of time. RNC #2 man received special treatment? Depends on your viewpoint.

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xclusive85 3 years, 3 months ago

both pleaded guilty to pleaded guilty to committing misprision, a felony punishable by up to three years in prison, a $250,000 fine and a year of supervised release.

Also, pleaded guilty to pleaded guilty to? Do the editors even read the articles before allowing them to be posted?

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Shane Rogers 3 years, 3 months ago

"Brown asked Assistant United States Attorney Richard Hathaway, who appeared for the prosecution, to outline Liebsch's involvement in the case and to do so deliberately." -- On my first read-through I'm thinking to myself, "Self, who is this mysterious Mr. Brown fellow?". So I rescan the previous couple of paragraphs thinking that I have most certainly glossed over the person's name....nope.

So I continue reading....ah, so perhaps it's this Judge Wesley Brown fellow.

LJW, this is not the first time that I've noticed this reading your site. Can we please introduce the person's complete name before referring to them by their last name?

Thanks.

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edjayhawk 3 years, 3 months ago

What does "up to 20 years" mean as opposed to the full 20?

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xyz 3 years, 3 months ago

Further proof that all KU employees on the internal team that investigated this mess, as well as whomever (besides Lew) decided to promote Kassie should be fired ASAP. And Jack Focht needs to return his check. New AD Zenger needs to clean the Lew stench from his department ASAP.

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consumer1 3 years, 3 months ago

she should have gotten David Wittig's attourney . No Jail time at all. and he stole allot more than she did.

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Bob_Keeshan 3 years, 3 months ago

How did the KU investigation miss over $100,000 in personal gains?

Can't wait to hear what Jack Focht has to say about that. Liebsch was deemed so immaterial to this scandal that she got promoted.

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Kontum1972 3 years, 3 months ago

hope she likes her new room-mate....

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trinity 3 years, 3 months ago

"employees have pleaded guilty in the case, which involves more then $1 million in football and basketball tickets." i copied and pasted this line simply due to the use of "then" where T-H-A-N should be. good lord.

ducks&covers

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funkdog1 3 years, 3 months ago

Really? Twenty years? There are people who commit murder and get far less time.

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Healthcare_Moocher 3 years, 3 months ago

Lew Perkins has a dog in this race... I wonder who is protecting his butt?

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yankeevet 3 years, 3 months ago

She is making a deal to save herself; do not pass go; just go strait to jail............

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consumer1 3 years, 3 months ago

The first snitch gets the best deal. Rodney Jones has his rear covered.

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macon47 3 years, 3 months ago

6 months in a golf course prison

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