38 Studios investigation closes

THE PROPOSED $16 million settlement with First Southwest Co., a former financial adviser for the state when it invested $75 million into the now defunct video game company 38 Studios LLC, will be heard in court on Feb. 9.
THE PROPOSED $16 million settlement with First Southwest Co., a former financial adviser for the state when it invested $75 million into the now defunct video game company 38 Studios LLC, will be heard in court on Feb. 9.

PROVIDENCE – The 38 Studios criminal investigation is now closed, Attorney General Peter F. Kilmartin said Friday, even though he said he was ready to reopen it in the wake of the last civil settlement being reached earlier this week.

Kilmartin’s announcement comes two days after R.I. Commerce Corp. said it has reached a $16 million proposed settlement with First Southwest Co., a former financial adviser for the state when it invested $75 million into the now-defunct video game company 38 Studios LLC run by former Boston Red Sox pitcher Curt Schilling.

Kilmartin said he thought the criminal investigation would be reactivated when the civil litigation pending in Superior Court was resolved, and was prepared to resume the case with his prosecution team. However, he said when he reached out to Col. Ann Assumpico, superintendent of the state police, he was told she would not commit any more resources to it, and that her decision was final.

“Without the investigative resources of the State Police, however, it is fruitless to pursue these paths alone. Therefore, as of this date, the criminal investigation of the 38 Studios scandal is closed,” Kilmartin said.

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Assumpico released her own statement in response to Kilmartin, saying the criminal investigation into the case ended more than a year and a half ago with no charges resulting. She said when she met with Kilmartin she would be open to reopening the case if there were “new, solid, credible leads.”

“The information the Attorney General’s Office has provided to us is not persuasive enough to reopen the case at this time,” Assumpico said.

Gov. Gina M. Raimondo said in a statement on Wednesday that she was pleased about the proposed settlement. Raimondo said if the court approves the settlement, slated for Feb. 9, she will petition immediately for the release of all materials related to the Grand Jury investigation, saying Rhode Islanders “deserve to have access to all of the information that is known. Complete transparency is the best way to ensure that such a disastrous deal never happens again.”

Kilmartin said he remains “greatly concerned about setting the precedent of releasing investigative records regarding a criminal investigation that thus far resulted in no criminal charges.”

“As Attorney General, I have an obligation to prosecute those who break the law, but I also have an obligation to adhere to my professional responsibility to respect the rights of all citizens, including witnesses, and the rights of those investigated, but against whom no charges have been filed. I am also very concerned that the release of information, especially the names and statements of cooperating witnesses, will chill the willingness of witnesses to come forward to law enforcement in the future, particularly in cases of public corruption,” Kilmartin said.

“The State Police will now reach their own conclusion regarding the release of documents, and our Civil Division will notify the parties to the pending APRA litigation of today’s developments,” he continued.

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