Miami Heat’s Terry Rozier seeks dismissal of charges in federal gambling case

A lawyer for Miami Heat guard Terry Rozier asked the federal court judge overseeing his case to dismiss the federal government’s case against him after federal prosecutors charged him as part of an expansive sports gambling indictment. Jim Trusty, Rozier’s attorney, filed a motion to dismiss earlier this month in the Eastern District of New York, claiming that prosecutors there cannot bring the charges against him based on a Supreme Court decision that limited federal fraud prosecutions and because, he argues, the crimes they alleged against Rozier are actually governed by state law.

The motion, which became public Tuesday, took aim at the prosecutors’ very ability to bring charges for the alleged sports gambling impropriety. Rozier has been charged with wire fraud conspiracy and with conspiracy to commit money laundering after he was arrested in Florida in October following the Heat’s first game of the season. He pled not guilty to both counts at an arraignment at a Brooklyn federal courthouse earlier this month. He was released on $3 million bond.

“The government has billed this case as involving “insider betting” and “rigging” professional basketball games,” Trusty, the lawyer for Rozier, wrote. “But the indictment alleges something less headline-worthy: that some bettors broke certain sportsbooks’ terms of use against wagering based on non-public information and “straw betting. The government charged Terry Rozier … because allegedly the sportsbooks completed wagering transactions they otherwise might not have honored. This theory of fraud has repeatedly been rejected and should be rejected again in this case.”

Rozier’s lawyer argues that a 2023 Supreme Court ruling in Ciminelli v. United States limits the DOJ’s ability bring fraud charges against him because the court ruled that not disclosing potentially important economic information that could help them make economic decisions is not enough for it to be a crime and that it must mean depriving victims of actual property rights. The indictment counts multiple sportsbooks as the victims in the case. He also asks the federal judge to dismiss the charges because states have laws on the books that govern sports betting, and deal with the allegations against Rozier and other co-defendants, arguing it is not for the federal government to prosecute.

Rozier is alleged to have told Deniro Laster, a childhood friend, that he was going to come out early from a March 2023 game against the New Orleans Pelicans. Rozier came out of that game after playing 9 minutes and 34 seconds and he did not hit the points, assists and 3-pointer thresholds. He did not play the final eight games of the season. Prosecutors, in the indictment, cast doubt to the validity of the injury that took Rozier out of the game. Rozier’s lawyers, in a footnote in their filing, said “the government’s cynicism as to whether Mr. Rozier was injured is belied by a variety of witnesses and medical professionals who were aware of Rozier’s injury, in many cases before the Pelicans game.”

Laster then sold that information to a number of sports gamblers, who placed bets that Rozier would not reach certain points, assists, rebounds and 3-pointer totals. Laster was charged as well.

Those allegations, Rozier’s lawyer writes, might have broken the rules of the sportsbook but were not crimes.

“In essence, the government seeks to impose criminal liability based on defendants’ and coconspirators’ violations of the Betting Companies’ rules,” the legal filing argues. “But as courts have recognized, that is not enough to allege a material omission: a person does not commit fraud ‘by failing to disclose that he or she is not complying with certain rules.’”

Rozier was placed on unpaid leave by the NBA days after he was arrested. He is in the final year of a four-year, $96.3 million contract. He had an arbitration hearing last week with the NBA over whether he should get paid while on leave after the NBPA filed a grievance.