"I knew that there were certain relationships that existed between referees and players, referees and coaches, and referees and owners that influence the point spreads in games," Donaghy explained.
Asked what a point spread is, Donaghy said, "A point spread is where a team is favored to win or lose by a certain amount of points."
"You say that certain refs like or dislike certain players? Certain coaches? Certain general managers?" Simon asked.
"And certain owners," Donaghy added.
"You told us 'I knew these guys. Knew who they liked, who they despised and who they would help or screw over,'" Simon said.
For example, Donaghy cited tempestuous superstar Allen Iverson. Some refs liked him, some did not. Natural enough.
But Donaghy said several refs would let their feelings influence their calls by either favoring Iverson or favoring his opponents. And that would affect the score.
"And I knew those relationships, whether they were positive or negative had an effect on the game," Donaghy said.
"So, you know when Iverson was playing. And you knew which refs were there. You knew whether to bet on the Iverson team or on the other team?" Simon asked.
"Yes," Donaghy said.
"Iverson wouldn't talk to us, he didn't want refs to get mad at him. But his manager told us that the way the refs were treating him, some for, some against, made him sick," Simon remarked.
"I do believe Allen Iverson knew this. And I believe all the players know this. That certain referees treat them much better than others," Donaghy said.
Donaghy told us that two years ago Iverson had incurred the wrath of the refs.
"He had threatened one of our officials and the NBA fined him $25,000. And we felt as a group that he should have been suspended. And because he wasn't, we felt like we would teach him a lesson," Donaghy recalled.
When he worked an Iverson game on Jan. 6, 2007, he bet against Iverson's team.
"Because you knew that all the refs were gunning for him? This was openly discussed?" Simon asked.
"Openly discussed," Donaghy claimed. "And I knew that the other two referees and I sought out to do a little justice of our own."
The refs quickly called curious fouls on Iverson, including rarely called fouls for palming. It threw his game off, and his team lost.
"According to the game's announcers, even late in the game, you kept hurting Iverson's team by letting defenders bludgeon him without calling any fouls," Simon told Donaghy, before showing him video footage of the game.
"We're looking at a foul that was let go," Donaghy acknowledged. "Obviously in the pregame meetings we came to the conclusion that we were not gonna give Allen Iverson any marginal plays for the basket. And that absolutely should have been called a foul that I and the other referees passed on."
Asked if anyone in the NBA knew about it, Donaghy said, "There was a group supervisor at the game that came in at half time who was laughing and stated that he felt that Iverson had gotten the message."
Donaghy said the supervisor approved his punishment of Iverson.
The NBA would not let that supervisor or any of its refs talk to us.
In that game, Donaghy did make calls that helped him win his bet. But, he insists that wasn't the point. He says all he wanted to do was punish Iverson. But yes, he did win his bet.
Special Agent Philip Scala, who retired from the FBI last year, told Simon Donaghy would bet on a game when he knew who the refs were, and that they felt strongly about certain players.
Asked what that tells him about how certain refs call games, Scala said, "Most of the refs we believed were honest and calling the game as they had seen it. There was this aspect of judgment. A person should understand his bias and make sure he leaves that on the sideline."
"But obviously that wasn't the case or else Donaghy wouldn't have been picking 80 percent of the games," Simon pointed out.
"There seemed to be some bleeding in that area," Scala said.
"Some bleeding sounds to me like an understatement?" Simon asked.
"Could be," Scala acknowledged.