Former referee Tim Donaghy pleaded guilty to two felony charges Wednesday in an NBA betting scandal that has rocked the league and raised questions about the integrity of games.
Donaghy, who has strong ties to the Philadelphia suburbs, faces a maximum of 25 years in prison when he is sentenced for conspiracy to engage in wire fraud and transmitting wagering information through interstate commerce. He was released on a $250,000 bond.
In court, Donaghy blamed his troubles on a "gambling addiction," telling a federal judge he is now getting treatment, reports CBS News correspondent Bianca Solorzano.
Donaghy explained how the betting scheme worked. He used his privileged information — "player's physical conditions" and who "would be refereeing games" — and told his alleged co-conspirators, often in code, how they should place their bets, adds Solorzano.
Donaghy was paid as much as $5,000 for each correct pick that beat the point spread, CBS News producer Phil Hirschkorn reported.
The information was not public, said U.S. District Court Judge Carol Bagley Amon.
Donaghy also must pay a $500,000 fine and at least $30,000 in restitution.
Standing ramrod-straight, hands clasped in front of him, Donaghy spoke in nearly inaudible tones as he told the judge that he is seeing a psychiatrist for his gambling addiction and is taking an antidepressant and anxiety medication.
"I was in a unique position to predict the outcome of NBA games," a soft-Donaghy told the court.
Prosecutors said in open court that Donaghy bet on games himself; but that was not a specific part of the verbal admission he made before the judge.
"Tim is relieved this part of the proceeding is over and we look forward to completely resolving this matter in the coming months," defense attorney John Lauro told The Associated Press after the plea. "Tim deeply regrets his involvement in this matter and especially the pain it has caused his family, friends and co-workers."
His alleged conspirators in the scheme were two high school friends: James Battista, 40, a self-described professional gambler nicknamed "Baba" and "Sheep," who allegedly placed the bets; and Thomas Martino, 41, who received telephone tips, sometimes in coded language, on what teams to bet on from Donaghy and relayed the info to Battista, Hirschkorn reported.
Both men were in the custody of federal marshals on Wednesday and were awaiting arraignment on conspiracy charges carrying a maximum penalty of 20 years.
The judge said Donaghy concealed the scheme from the NBA and other referees to avoid detection.
Donaghy is a Delaware County, Pa., native who graduated from Cardinal O'Hara High School in Springfield, Pa., and Villanova University.
The FBI first contacted the NBA on June 20 to talk about a referee alleged to be gambling on games, and the two sides met on June 21, NBA commissioner David Stern said last month. Donaghy resigned July 9 after 13 years as a referee; Stern said he would have fired him sooner but was told it might affect the investigation.
Stern blamed a "rogue, isolated criminal" for the betting scandal that threatened the credibility of every referee.
"We will continue with our ongoing and thorough review of the league's officiating program to ensure that the best possible policies and procedures are in place to protect the integrity of our game," Stern said in a statement Wednesday.
Donaghy was rated in the top tier of officials, Stern said, and there was nothing suspicious about the frequency of his foul calls. He was assigned to work in the second round of the playoffs, with his last NBA game coming during the Phoenix-San Antonio Western Conference semifinal series.
"Tim Donaghy's former colleagues on the NBA's officiating staff are deeply saddened to learn that he pleaded guilty today to wagering on professional basketball games and providing others with non-public information on those games," referees association spokesman Lamell McMorris said. "This is a truly unfortunate case of wrongdoing by one of our own who has admitted to having a serious gambling problem.
"We recognize that a cloud has descended upon all referees, but we are committed to showing the public that this was an isolated event and that NBA officiating is conducted at the highest levels of honesty, integrity and fairness."
No other NBA officials or players are expected to be involved in the scandal, which Stern called the "most serious situation and worst situation that I have ever experienced either as a fan of the NBA, a lawyer for the NBA or a commissioner of the NBA."
Donaghy's next court date is Nov. 9; no sentencing date has been set.
He turned over his passport and must seek permission to travel anywhere other than Pennsylvania, Florida or New York.