BALCO twist: Sources say Anderson's wife targeted for tax issues

Updated: June 20, 2008, 12:16 AM ET
By Mark Fainaru-Wada and T.J. Quinn | ESPN.com

For more than a year, Barry Bonds' personal trainer sat inside a federal prison in Dublin, Calif., refusing to testify about his knowledge of performance-enhancing drug use by his superstar client. Finally, on Nov. 15, 2007 -- the day Bonds was initially indicted on perjury charges -- Greg Anderson was set free, seemingly ending a major squeeze play by local prosecutors.

The Internal Revenue Service has been the lead investigative agency in the BALCO case, and the sources said they believe the pressure on Gestas -- and possibly other family members -- is directed at finally getting Anderson to cooperate against Bonds.

Instead, even as Anderson was released, the government made a move on another member of his family. Within days of the trainer's release, his wife, Nicole Gestas, received a letter from federal prosecutors informing her that she is the target of a grand jury investigation, four people with knowledge of the BALCO steroids case told ESPN.

The sources asked not to be quoted by name because of the ongoing investigation. Since the initial target letter went out, two of the sources, both lawyers, say they have learned that the government's interest in Gestas stems from tax-related issues.

The Internal Revenue Service has been the lead investigative agency in the BALCO case, and the sources said they believe the pressure on Gestas -- and possibly other family members -- is directed at finally getting Anderson to cooperate against Bonds.

The target letter and ensuing pressure apparently had been pushed to the back burner for a time, while the government pursued two other perjury-related cases from BALCO, but one of the lawyers believes the government has returned its attention to Gestas.

Bonds has been charged with 14 counts of perjury and one count of obstruction of justice. The target letter, though not specific about allegations against Gestas, 37, means she is under investigation by a San Francisco federal grand jury for possible violations of federal law.

The target letter and the pressure on Gestas represent an unexpected twist in a case that is now in its sixth year and that has undone some of the biggest names in professional and amateur sports. Bonds, though, has been the lightning rod throughout; his indictment has him facing the possibility of more than two years in prison if found guilty.

The New York Times first reported the target letter on its Web site Thursday.

Anderson had been viewed by prosecutors and investigators as someone who could make a case against Bonds airtight -- if the trainer were to testify. But Anderson steadfastly refused, earning a contempt of court citation that put him in prison for a total of 13½ months.

Now, though, his wife is in the government's crosshairs, presenting renewed issues for the trainer. Neither Anderson nor Gestas could be reached for comment.

Until now, Gestas' involvement in the case seemed limited. On Sept. 3, 2003, the day the government launched raids on BALCO and the homes of Victor Conte and Anderson, court records show Gestas was interviewed for about 15 minutes by Jeff Novitzky of the Internal Revenue Service's Criminal Investigations Unit and three other agents.

Novitzky had confronted Anderson at a gym near BALCO, then took him back to the Burlingame, Calif., condominium the trainer shared with Gestas. Upon arriving, Anderson told his then girlfriend, "The BALCO thing has followed me here," according to a declaration by Novitzky.

Gestas, also a personal trainer, told the agents she had "never heard that Anderson sells steroids," and she denied knowing there were steroids and syringes in a kitchen cabinet and the refrigerator of the condominium she shared with Anderson, according to a memorandum of interview. Asked how she never saw the drugs or syringes, she told investigators "it was Greg's area and she never looked," according to the document.

Gestas also denied any knowledge of approximately $60,000 in cash found inside a safe in a kitchen cabinet, court records show. She told agents that Anderson paid her $1,000 in cash each month for rent.

In an October 2004 declaration, responding to allegations by Anderson and Gestas that he and other agents had not acted within the law the day of the raid, Novitzky defended his actions and indicated that he believed Gestas had lied during her September 2003 interview.

The agent recounted Gestas' statement that she had no knowledge of Anderson's involvement with steroids, and he wrote, "At one point, I told Gestas that I did not believe she was being truthful in this regard based upon steroids which had been found within the refrigerator inside the residence."

Novitzky also suggested that Gestas had lied in a 2004 court filing that was part of a motion by Anderson, Conte and the two other BALCO defendants to suppress evidence on the grounds of government misconduct. Gestas and Anderson both suggested the IRS-CI agent had purposely refused to provide them with a copy of the search warrant, a charge Novitzky said was "untrue."

Anderson ultimately pleaded guilty to one count of distributing steroids and one count of money laundering. Federal prosecutors had sought to have Anderson name names of players to whom he provided the drugs in his plea agreement, but the trainer refused, according to court records. He was sentenced to three months in prison and three months of home confinement.

Upon Anderson's release, in a move characterized by legal experts as unusually tough, the government turned around and subpoenaed the trainer in April 2006 to testify in the perjury probe of Bonds. Tony West, a former federal prosecutor, told the San Francisco Chronicle that the move was "an unusual and pretty heavy-handed tactic."

Anderson steadfastly refused to cooperate with the subpoena and, beginning in early July, was sent to prison in an effort to coerce him to change his mind. He did not. Anderson ultimately served 413 days in prison in connection with the contempt citation, freed briefly twice during legal maneuvering. He had been in jail for nearly one year straight before his Nov. 15 release.

Mark Fainaru-Wada and T.J. Quinn are reporters for ESPN.

T.J. Quinn joined ESPN in November 2007 as an investigative reporter for ESPN's Enterprise Unit, which is charged with developing long-form, investigative features to be presented across multiple platforms.