The smear campaign is working and Jim Agate appears to be scum, financially desperate and baselessly suing one of the richest men in the world. After all, Teddy Forstmann, CEO of IMG, is a billionaire and one of the most powerful men in the sports world. Agate, who filed a lawsuit claiming he was the go-between for Forstmann with Costa Rican gambling houses, is not.
IMG has aggressively said that Agate tried this lawsuit once before and it was "thrown out,'' and that Agate later sent a letter to Forstmann apologizing for "falsely attacking'' him. IMG even sent me a copy of that letter.
But documents FanHouse obtained this week from sources close to the situation show Forstmann apparently paid Agate $575,000 in hush money over the past 18 months as part of a legal settlement to make that first case disappear.
And the apology? Term No. 6 in the settlement says this: "Agate will deliver a letter to Forstmann in which Agate apologizes for his conduct directed at Mr. Forstmann ...''
Did Agate's apology show a mentally unstable man, as IMG portrayed, or one cutting a deal with a rich guy who wants his problems to go away?
"Bought and paid for,'' a source said about the apology.
Forstmann's attorney, Mike Sitrick, responded via email, "There was no hush money because there was nothing to hush."
Sitrick said Forstmann did pay Agate an undisclosed sum to avoid the cost of further litigation, and that the original lawsuit "contained none of the false allegations concerning betting, racism or any of the other nonsensical claims that are in the 2010 lawsuit."
Sources also played me a scratchy voice mail message of what sounds like Forstmann asking Agate to place a $2,000 bet on Vijay Singh, an IMG client, to win the British Open. Forstmann has said he has bet on sporting events but hasn't acknowledged betting through Agate. Agate and his attorneys declined to comment, but the lawsuit lists a copy of that tape for evidence.
And this sports gambling scandal is about to start mushrooming, a disaster for tennis -- as Agate claims Forstmann got inside information from his client, Roger Federer -- but also for golf, NCAA basketball and possibly other sports, too. In court documents from the current lawsuit, Agate lists nearly 600 bets he claims to have placed for Forstmann, including more than $150,000 on the 2007 NCAA basketball tournament alone.
"Any bets that Mr. Forstmann may have made on college sports would have been made before IMG acquired the business in 2007 that put IMG into the college sports business,'' Sitrick said. "He has made none since that time."
Nowhere in there is a denial that Forstmann bet on college sports.
IMG is huge in the sports world, and its CEO has power and access. He compromises the world's most famous athletes, and their sports, by placing bets.
An IMG vice president told FanHouse that Forstmann did, as Agate claimed, bet $40,000 on Federer to beat Rafael Nadal in the 2007 French Open final. IMG seems to say that betting for Federer, instead of against, makes it OK.
Agate's suit also claims that Forstmann bet on Singh in a head-to-head bet over Tiger Woods, another IMG client. IMG denies that.
Forstmann has access to information that others don't have.
When someone has that much power over a sport and that much control, you start wondering if his betting is going to influence the outcome. That's why it's against the rules.
A sport depends on its credibility, that games are played fairly and that players are playing by the rules. Forstmann is a big player, whether on the court or off, and isn't playing by the rules. He is putting suspicion in the minds of fans, and once that suspicion is there, it's hard to get past it.
But Nadal is also an IMG client. More importantly, the Tennis Integrity Unit said it is a violation of tennis rules for a tournament owner -- IMG owns and operates several tournaments -- to bet on the game at all.
Forstmann has given one interview since Agate filed a lawsuit again. He told the Daily Beast that he did lose $40,000 on that match, but that it's a small sum for someone as rich as he is. He also referred to Agate as a "scumbag lowlife'' and "shakedown artist.'' The VP, Jim Gallagher, called Agate a "whackjob.''
But here's a question: if Agate is scum, then why did Forstmann hang around with him for at least 10 years, traveling him around the world on his private plane, placing him in his Huggy Bear charity tennis tournament in the Hamptons, golfing with him in some of the world's most prestigious courses and putting him together with some of the world's beautiful people?
Here's another question: if Forstmann didn't think there was anything wrong with his gambling, then why was he having someone else do it?
Agate might just be the kind of guy willing to do the dirty work for someone who wants to keep his hands clean.
The sports world has a huge problem on its hands, as Forstmann so recklessly and arrogantly has placed himself above the rules, and above conflicts of interest.
IMG serves as the management firm for many of the world's most famous athletes, including Tiger Woods. Its college division is the self-described leader in NCAA licensing and marketing. It has tentacles worldwide in soccer.
Federer has said he had nothing to do with Forstmann's bet. It's hard to believe Federer would be involved, as he has taken seriously his responsibility to the game. But Forstmann has now put Federer in a position to have to defend himself.
In fact, Forstmann said he might have called Federer the night before the match. What was said? Did Federer know that Forstmann was planning to bet?
Well, Forstmann and IMG have blasted Agate, saying his claims are ludicrous. Yet Forstmann admits to betting on sports. And the voice mail shows it is likely he bet through Agate.
As for whether the first lawsuit was thrown out or settled, it might have been both. First, it was discharged, and then, apparently, Agate was about to file again. Forstmann's attorneys, in the current suit, have filed a motion saying that the first case was dismissed from court over two years ago and then "subsequently settled pursuant to a settlement agreement between James Agate, the principal of Agate Printing, and Theodore Forstmann.'' The attorneys are calling for that settlement to be sealed.
Agate's case makes several claims, mostly based on money he feels Forstmann promised him, or business he promised Agate Printing through IMG or Forstmann's 24-Hour Fitness, through the years without following through. Most of those alleged promises, though, seem to have been made by word of mouth, not signed contracts.
Agate apparently owes more than $1 million to the IRS, and claims that the bulk of that was the result of Forstmann wiring his sports gambling money into Agate Printing's accounts. The IRS then apparently became suspicious of how Agate Printing had so much more money coming into and out of his accounts than his claimed business revenues would amount to. Agate says Forstmann promised to cover any tax liabilities from his gambling.
The settlement says that Agate is not eligible to sue again. The current suit is not filed by Agate, but by Agate Printing.
Documents included as evidence in Agate's filing show multiple e-mails sent from Agate to Forstmann with betting lines.
He has phone records he says show that Forstmann called him, and then that he called betting houses in Costa Rica minutes later. He has documents that purportedly show Forstmann wiring money into his accounts.
And he lists 584 bets he claims in court documents to have made for Forstmann on NFL games, the NCAA basketball tournament, NBA, golf, baseball, tennis, college football and NHL. Most bets seem to be around $2,000 or $3,000.
But tennis and the NCAA have been fighting off image problems from betting scandals, and this one, from such a prominent person, is not going to help.
The IMG campaign says that Agate is making the whole thing up. But Forstmann has already admitted to making at least one big bet that Agate brought to light.
If Forstmann isn't careful, credibility might start swinging from the billionaire to the "scumbag lowlife.''