38 Studios criminal investigation: No charges to be filed

A press conference will be held Friday afternoon at state police headquarters to report the findings of the criminal investigation into 38 Studios LLC.
A press conference will be held Friday afternoon at state police headquarters to report the findings of the criminal investigation into 38 Studios LLC.

(Update 5:18 p.m.)

SCITUATE – Officials said there will be no criminal charges filed as a result of an investigation into 38 Studios LLC.

A press conference was held Friday afternoon at state police headquarters to report findings of the criminal investigation into the failed video game venture by former Boston Red Sox pitcher Curt Schilling that left taxpayers on the hook for a $75 million loan guarantee.

Col. Steven G. O’Donnell, state police superintendent, and Attorney General Peter F. Kilmartin discussed investigation results.

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“There were no provable criminal violations of the Rhode Island General Laws in connection with the funding of 38 Studios, the disbursement of funds to 38 Studios and by 38 Studios to vendors. … The quantity and quality of the evidence of any criminal activity fell short of what would be necessary to prove any allegations beyond a reasonable doubt and as such the Rules of Professional Conduct precluded even offering a criminal charge for grand jury consideration,” according to a press release issued at the press conference.

The release said the investigation focused on events that took place over a two-year period, from 2010 through 2012, the year the company folded. It also said the investigation is separate from civil litigation pending, and the results of the criminal investigation should have no effect on the civil case.

However, the release said that if facts become known that justify the reactivation of the investigation, the state police and Attorney General’s Office are prepared to do so.
In a statement, Gov. Gina M. Raimondo said she has no plans to call for an additional investigation.

“The governor continues to support all efforts to recover as much taxpayer money as possible,” Raimondo spokeswoman Marie Aberger said in the statement. “38 Studios was a bad deal for Rhode Islanders and the governor was against it from the beginning, but it should not stand in the way of other smart and responsible initiatives designed to attract businesses and create jobs.”

The civil lawsuit, for which jury selection is slated for October, could decide whether financiers, including Wells Fargo Securities LLC and several others, misled Rhode Island into making the $75 million, taxpayer-backed loan to finance the now-bankrupt video game company.

The history of 38 Studios was rehashed in the press release, which included details about the R.I. Economic Development Corp. approving financing for the venture in July 2010, the step that allowed for the issuance of $75 million in bonds.

“The EDC has been deliberating this matter and performing its due diligence for the last several months,” Keith W. Stokes, RI EDC executive director, said at the time, according to the release.

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