Special Report: Arizona Gubernatorial Candidate Doug Ducey Hails From an Infamous Ohio Organized-Crime Family | Valley Fever | Phoenix | Phoenix New Times | The Leading Independent News Source in Phoenix, Arizona


Special Report: Arizona Gubernatorial Candidate Doug Ducey Hails From an Infamous Ohio Organized-Crime Family

The all-American image that Doug Ducey projects, one which helped him win the primary and may help him win the general election, belies a family tree that includes two generations of his mother's family's involvement in organized crime.

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Most of Doug Ducey's professional life has been spent in sales of one kind or another.

So when the 50-year-old entrepreneur turned politician was given a chance to sell himself at an exclusive June retreat sponsored by billionaire siblings Charles and David Koch, naturally he emphasized the positive.

According to secret recordings of the event recently made public as part of a special report by The Nation magazine and the YouTube channel The Undercurrent, Arizona's state treasurer had attended these Koch brothers summits before and knew the audience consisted of potential big-money contributors.

Ducey spoke their language. He talked up the success of Cold Stone Creamery, which he and his partner sold in 2007, boasting that the company grew from a few stores to "1,440 in all 50 states" without any assistance from the public sector.

"We did it without government," he told the summit's attendees. "We did it without subsidies. We did it without tax incentives for chocolate-dipped waffle cones."

Ducey's audience chortled. Delivered with a touch of humor, this evocation of independent, can-do capitalism was the perfect pitch to the crowd of plutocrats, facts to the contrary notwithstanding.

See, franchisees for Cold Stone Creamery, like franchisees of other fast-food chains, benefit from loans backed by the U.S. Small Business Administration.

In a recent analysis, the Wall Street Journal reported that Cold Stone Creamery was one of "the 10 worst franchise brands in terms of [SBA] loan defaults," coming in at number four, with a nearly 30 percent failure rate.

But sharing such negatives does not help close a deal. As they say in sales, "Never answer an unasked question."

So Ducey didn't delve into the downside of Cold Stone's rapid growth.

Similarly, when he discussed how, as state treasurer, he successfully campaigned against a proposition that would have made permanent a temporary one-cent state sales tax, Ducey didn't mention the mess the state's budget currently is in or how Arizona faces a massive $1.5 billion deficit over the next two years, which the sales tax would have helped ameliorate.

Ducey normally does not offer up adverse information about his state, his accomplishments, or his personal history. What politician does?

"I don't come from any political background," Ducey told attendees. "I grew up in Toledo, Ohio. My dad was a cop. I'm very much a product of the Midwest and the working class."

He also related how, during his junior year at Toledo's St. John's Jesuit High School, his school counselor pulled a Horace Greeley and pointed toward Arizona on a map, suggesting to Ducey that there was opportunity aplenty out West.

"So I got in my Datsun B210 and drove from Toledo to Tempe," he said. "I didn't know one person. I had never been in Arizona."

Ducey studied finance at Arizona State University and married his college sweetheart, Angela, a beauty queen with whom he's had three clean-cut Catholic boys.

After working for Procter & Gamble in Los Angeles and Chicago, he returned to Arizona and got involved with a local ice cream retailer, which he helped turn into a vast chain before selling it for millions of dollars to Scottsdale's Kahala Corporation.

Turning his eye to politics, he ran for treasurer in 2010 and won, deftly using the low-profile office as a stepping stone to greater things.

This year, in a campaign he helped bankroll with $3 million of his own fortune, he emerged victorious from a six-way Republican primary for governor, with a 37 percent plurality.

But the all-American image Ducey projects, one which helped him win the primary and may help him win the general election, belies a family tree that includes two generations of his mother's family's involvement in organized crime.

That said, New Times and The Center for Investigative Reporting discovered no evidence that Ducey ever profited from the activities of his involved maternal relatives -- or that the GOP candidate engaged in any criminal activity.

According to newspaper accounts and public records from various court and congressional hearings, four of Ducey's relatives in an Italian-American family called Scott (anglicized from Scotti) were involved in illegal gambling in Ohio.

Family members ran after-hours gambling clubs and participated in bookmaking, numbers-running, extortion, loan-sharking, and other lucrative illicit activities from the 1920s through the 1980s.

The candidate's maternal grandfather, William Scott (a.k.a. Bill Scotti), was a convicted bookmaker who partnered with members of the Detroit mob.

His son Billy Scott, Ducey's uncle, was a high-profile sports bookmaker in Toledo who did time in federal prison in Arizona before fleeing to the Caribbean island of Antigua, where he became an online gambling kingpin.

Uncle Billy returned to the United States in 2012 to plead guilty in federal court to international money laundering and illegal Internet wagering.

Ducey's great uncle Tony Paul Scott (a.k.a. Neufio Scott), his grandfather's brother, was among Toledo's "most legendary racketeers" and one of the "elders of the loosely knit Toledo crime family," according to the Toledo Blade, the city's daily newspaper.

During his long life, Tony Paul was arrested numerous times, incarcerated for illegal gambling and highway robbery, and eventually stripped of his U.S. citizenship, though he was allowed to remain in this country until his death in 1993.

These sins of the state treasurer's fascinating bloodline have remained unknown to the general public. Until now.

Both public records and Ducey's family's digital footprint have been helpful in understanding the candidate's relation to a world that sometimes resembles Once Upon a Time in America or The Sopranos, depending on the generation involved.

A 1963 marriage certificate from Ohio's Lucas County, of which Toledo is the county seat, records that at age 19, Madeline Scott, Ducey's mother and the daughter of William and Madeline Scott, wed Douglas Roscoe, who refers to Ducey on Facebook as the "next AZ Governor, my son Doug Ducey."

It's one of several of Roscoe's Facebook references to Ducey and other members of Ducey's family.

According to this, Roscoe is Ducey's cop father, and he identifies himself online as having formerly been with the Toledo Police Department.

Contacted by The Center for Investigative Reporting for this story, the TPD confirmed that Doug Roscoe served as an officer there for about 12 years, from October 1965 to April 1977.

Ironically, during that period, Ducey's grandfather, grandmother, and uncle --Roscoe's in-laws -- were under investigation by various law enforcement agencies.

On Ducey's campaign website, the candidate states that he "visits his dad in Toledo every year around Father's Day."

And Roscoe says on Facebook that he's traveled to Arizona to visit his son's family and attended Ducey's 2011 inauguration as treasurer in Phoenix.

Doug Ducey was born April 9, 1964, the eldest of three siblings, including his younger brother, Nick (whose family nickname is "Nino"), and a younger sister, Kristi.

A 1975 Lucas County marriage certificate records Ducey's mom, identifying herself as Madeline Roscoe, "a divorced woman," marrying Michael Ducey, her second husband, a city tennis champ and real estate developer.

During his address at the Koch summit, Ducey mentions "my folks splitting up my junior year" and "my mom moving west," which would have been about 1981, a year before he moved to Arizona to attend ASU.

(Note: A recent story in the Toledo Blade on Ducey's run for governor misidentifies his father as "Doug Ducey," but the only Doug Ducey in the candidate's family tree, according to public records, is the candidate himself.)

Currently, Ducey's mom, whom Ducey calls "Noni," is married to Ken Burk, an early investor in Cold Stone, whom Ducey talks about in an autobiographical profile he penned for the summer 2012 issue of MASK The Magazine, a publication of the nonprofit group Mothers Awareness on School-age Kids.

"Good luck and good timing collided," he writes, "when my stepfather, Ken Burk, and I put up money to open one of the first-ever Cold Stone Creamery franchises in Glendale in 1994."

Annual reports for Cold Stone Creamery on file with the Arizona Corporation Commission show that Burk was a stockholder in the company and once served as CEO and as chairman of the company's board of directors.

The Burks keep residences in both San Francisco and Arizona and regularly visit Ducey and his family here.

Official photos on the state treasurer's website show that the Burks attended Ducey's 2011 inauguration.

And on primary night 2014, they were on stage at the Hyatt Regency in downtown Phoenix with Doug Roscoe and other family members for Ducey's victory speech.

Relishing the moment, Ducey introduced "my mom, my dad, and our whole family," asking the crowd to welcome them.

Known only to a few on stage, Madeline Burk's father, Ducey's long-dead grandfather, William Scott, worked for years in the gambling operation of his more prominent brother, Tony Paul Scott.

Retired police detective Eugene Fodor was with the Toledo department from 1959 to 1987, part of that time with its organized-crime intelligence division.

Familiar with the Scott family's criminal influence in Toledo, but unaware of the tie to Ducey, Fodor spoke to The Center for Investigative Reporting for this story and explained that William Scott was "like a capo, in the New York verbiage of an organized crime gang."

Fodor, who investigated members of the Scott family while with the TPD, explained that William Scott partnered in the operation of illegal gambling with Anthony "Whitey" Besase, described by Fodor as an underworld figure with Detroit ties.

Several Toledo Blade stories from the 1960s and 1970s name William Scott (Ducey's grandfather), his wife Madeline senior (Ducey's grandmother), and their son Billy (Ducey's uncle) as partners in what could be considered the family business.

In a 1966 Blade item about the burglary of a strongbox from William Scott's home containing $10,000 in jewelry and cash, Scott is described as "a West Toledo man . . . known to the police as a betting shop operator."

A 1968 article from the Toledo daily tells how Scott, his wife, and son Billy "were among 10 persons indicted by a federal grand jury in Detroit . . . on charges of conspiring to conduct an interstate gambling operation."

Earlier that year, the three had been arrested as part of the same case during an IRS raid of gambling houses in Toledo and Detroit.

A Blade item from March 1968 said the raids and arrests were the result of a six-month investigation by "a federal task force investigating organized crime."

Agents seized "cash, betting slips, records and gambling paraphernalia, counterfeit postage stamps in Toledo and a submachine gun in Detroit," the Blade reported.

A 1971 Blade article mentions William and Billy Scott as among 10 people searched as part of raids on homes and businesses by the FBI in an ongoing gambling investigation.

Another 1971 item states that the father and son were pinched by local cops in a raid that netted more than $2,500 in cash and checks, football and World Series betting slips, and a 9-millimeter automatic pistol.

The same article mentions that William Scott had pleaded guilty to a state gambling charge in 1970 and paid a $500 fine.

William, Billy, and Madeline senior later were convicted in federal court, along with others, of "either operating or aiding and abetting in the operation of a [sports] betting business," according to a 1974 Blade item.

The convictions later were thrown out by the Sixth U.S. Circuit Court of Appeals, which ruled that evidence from government wiretaps in the case had been improperly obtained and must be suppressed.

William Scott died of a heart attack in 1975 at age 56.

His wife and Doug Ducey's grandmother, Madeline Scott, turned 90 in January.

Ducey and other members of his family call her "Gammy," and Ducey has posted family pictures featuring the nonagenarian on both his campaign's Twitter and Facebook accounts.

In the 2012 MASK article, Ducey again cited his Midwestern roots, and pointed to his grandparents as exemplars of his all-American upbringing.

"My mother's parents, my Gammy and Pa, were a very big part of our lives when I was young," he writes. "It was in that environment that the importance of family was instilled in me."

Ducey's great-grandfather, Dominic Scott, patriarch of the Scott clan, was born in Naples, and emigrated to the United States in 1905, while in his early 20s.

His 1950 obituary notice in the Toledo Blade states that he was a "wholesale fruit and vegetable dealer."

Dominic and his wife, Donnett, had nine children, according to census records. Tony Paul Scott (a.k.a. Neufio Scott), Ducey's great-uncle, was the eldest, born in 1902 in Naples.

William Scott, Ducey's maternal grandfather, was the youngest, born in 1919.

Both sons would make a career of organized crime, but it was Tony Paul who achieved legendary status.

Toledo crime historian Kenneth R. Dickson mentions Tony Paul as "a well-known Toledo bootlegger" in his book Nothing Personal, Just Business.

Dickson also calls Tony Paul an ally of Detroit mobster Thomas "Yonnie" Licavoli, later convicted of conspiring to murder rival Toledo bootleggers.

The link between Detroit and Toledo organized crime dates back at least to Michigan's enacting its own state prohibition in 1917, three years before the national prohibition imposed in 1920 by the 18th Amendment to the U.S. Constitution.

The website www.ohiohistorycentral.org, edited in part by history professors from Ohio State University, notes that during Prohibition, "bootleggers smuggled alcohol from Canada into Ohio across Lake Erie" and that during Prohibition years, "many Ohio cities gained a reputation for lawlessness."

Toledo, near the western tip of Lake Erie, became "a safe haven for mobsters and bootleggers" from Detroit, just an hour away by car, according to the site.

Gambling was part of what Harry Illman, author of the local Toledo crime history Unholy Toledo, called "the Detroit-Toledo connection," when he was interviewed by the Blade for a 1996 article.

In that piece, Blade staff writer Michael Sallah discussed Toledo's reputation as an "open gambling town" for the first half of the 20th century, observing that the city allowed gambling parlors to operate with relative impunity.

"By 1940," he writes, "Toledo was considered one of the gambling meccas of the Midwest."

When Detroit authorities cracked down on gambling there in 1941, gambling in Toledo flourished even more, according to Sallah.

From 1941 to 1952, the Toledo area was "covered in gambling clubs" with names like the Webster Inn, the Victory Club, the Chesterfield Club, the Dixie Inn, and the tony Club Devon, which Sallah says featured "a gaming parlor with 53 dice and blackjack tables and a restaurant that served prime rib."

The Detroit mob bused gamblers to Toledo, sometimes right up to the front doors of the various gaming establishments, and they took a percentage of the profits, according to Sallah and other sources.

Sallah writes that Ducey's great-uncle, Tony Paul, was one of the "main owners" of the Devon and several other such clubs, along with partner Joe Fretti, whom Sallah calls "the gambling kingpin of Toledo."

Both Fretti and Tony Paul were subpoenaed in 1951 to testify before the Kefauver Committee, the famous U.S. Senate inquiry into organized crime, which held televised hearings in 14 cities, drew 30 million viewers and made a household name of its chairman, U.S. Senator Estes Kefauver of Tennessee.

Officially known as the U.S. Special Committee to Investigate Crime in Interstate Commerce, the Kefauver Committee interviewed about 600 witnesses, including such legendary mob figures as Mickey Cohen, Frank Costello, and Meyer Lansky.

When the committee held hearings in Cleveland, it had a U.S. Marshal attempt service on Tony Paul. But he came down with a case of get-the-hell-out-of-town, so common at the time with those called to testify before the committee that wags referred to it as "Kefauveritis."

According to a Toledo Blade article reporting on the hearing, Tony Paul's wife told the marshal with a shrug that her husband "just got in a car with a friend and went to Florida."

Fretti did not invoke his Fifth Amendment right against self-incrimination and won kudos from Kefauver for his honest testimony, according to a transcript of the proceedings.

The mobster admitted to having been in the "illegal liquor business" during Prohibition and to having been "in and out" of the gambling business since Prohibition's repeal in 1933.

Asked his net worth, Fretti estimated it was $200,000 to $250,000 (equivalent to $1.8 million to $2.2 million in today's dollars) and said "practically all of it" was from illegal enterprises.

The cozy relationship between law enforcement and the mob was on full display as well.

Fretti would not admit to bribing Lucas County Sheriff George Timiney, but he admitted that he had known the sheriff "all my life" and had visited Timiney's home.

The sheriff also was called to testify and was cagey about the lack of enforcement of gambling laws in his county, telling Kefauver and other committee members that he and his deputies tried keeping the gambling clubs closed but that they kept "sneaking" back open.

He denied taking bribes, though he could not explain a mysterious $6,000 windfall he earned one year betting on horse racing at tracks in Detroit and Toledo.

Asked about Tony Paul Scott, Timiney admitted that he'd known Scott for 25 years and that Tony Paul was part of the county's gambling "clique."

Though he didn't make the hearing, Tony Paul's criminal history was entered into the record.

It showed that from 1917 to 1944, Ducey's great-uncle had been arrested numerous times on suspicion of auto theft, armed robbery, and homicide.

For example, according to the rap sheet, Tony Paul was arrested in 1917, along with several others, for the attempted holdup of a saloon, during which the owner was shot and killed. But Scott never was charged.

In 1921, Ducey's great-uncle pleaded guilty to highway robbery in Michigan and was sentenced to a year in state prison.

Scott again was arrested in 1924, according to the rap sheet, for allegedly running over a little boy and killing him, but he later was released.

In 1944, he was indicted, along with other Lucas County gambling bosses, for "keeping a room for gambling and exhibiting gambling devices."

Tony Paul pleaded guilty to the crime, spent 30 days in a "workhouse," paid a fine, and apparently went right back to running gambling clubs in Lucas County.

Fodor, the retired TPD detective, says Tony Paul and his brother, William, were "at the heart of Toledo gambling" during its heyday in the 1940s and 1950s.

But after dodging the Kefauver Committee, Tony Paul became the target of a years-long effort by the federal government to strip him of his citizenship. He was "de-naturalized" in 1955 but was allowed to stay in this country.

And he remained in the family business, judging from the words of a 1963 U.S. House investigative committee report, which referred to Tony Paul as "a ranking power among Toledo gamblers."

When he died 21 years ago at age 90, most of the millions of dollars he had made during his lifetime was invested in real estate in his wife's name, says a history of the time.

If there are echoes of The Godfather: Part II in the careers of brothers Tony Paul and William Scott, the gangster life of bookie, loan shark, and online betting czar Billy Scott, Ducey's uncle, is more akin to a mobster tale from filmmaker Martin Scorsese.

In fact, in a 1999 Blade article penned by Michael Sallah, one of Billy Scott's admirers likened him to "someone out of Goodfellas" and that with his short stature and pugnacious ways, Scott "reminded people of actor Joe Pesci."

If Scorsese's Goodfellas is the model, Scott was closer to Ray Liotta's character, based on real-life mobster Henry Hill, than Pesci's psychotic Tommy DeVito.

In the late 1960s and early 1970s, Scott emerged as Toledo's highest-profile gambler, whose flashy ways contrasted with the more traditional, low-profile demeanor of his father.

"He became a player because of his father," Eugene Fodor said.

Billy liked the attention, said the retired detective, and reveled in his position as the city's number-one bookmaker.

"His father would have killed him for all the trouble he was bringing to the gambling community by acting like a tough snot," Fodor told The Center for Investigative Reporting.

According to Sallah, Scott was collared nine times from 1966 to 1979 "for running illegal gambling enterprises, never serving more than nine months."

Sallah reported that Scott cruised Toledo in a Lincoln Continental, wore expensive clothes, and always carried a roll of bills and a .32-caliber handgun.

He would brag in bars that he was the biggest bookmaker in the city, with undercover cops taking note, Sallah wrote.

Toledo restaurateur Gus Nicolaidis recounted how Scott would hit up his clients for the money they owed him as they dined.

"If the guy asked for more time," Nicolaidis told Sallah for the Blade piece, "Billy would respond: 'What do I look like, Toledo Trust? I'm not a bank.'"

Scott was taking bets "from 160 people in nine states and Canada," according to Sallah, who reported that Scott later claimed he was pulling in $1 million a month from bookmaking.

But as with Liotta's character in Goodfellas, Sallah wrote that cocaine use and erratic behavior led to Scott's downfall.

Sallah reported that Scott became more aggressive when under the influence of coke, shooting out streetlights with his pistol and ordering tough-guy underling Irvin "Bear" Weltchek to intimidate anyone looking to welsh on a bet with the threat of physical harm.

"Weltchek later admitted in court that he fired several shots into the home of [an Ohio] man who owed Scott $100,000," Sallah wrote.

But Toledo cops were shadowing the bookie, and in 1981, Scott, on probation from a previous conviction, was arrested for cocaine possession, earning him two years behind bars.

By then, the local U.S. Attorney had a grand jury investigating Scott for possibly bribing cops and prosecutors, according to a 1998 Blade article.

The Blade reported that Scott entered into a deal with federal prosecutors, pleading guilty to fewer racketeering and extortion counts than he was charged with in exchange for his testimony against bookmaker Paul "Butch" Wilson, who had taken over Scott's illicit enterprise.

After this, Scott served 4 1/2 years in federal prison, part of that time in an Arizona facility, the Blade reported.

Following his incarceration, Ducey's uncle traveled to Antigua and Barbuda in the early 1990s and became a pioneer of the fledgling offshore gaming business.

According to federal court records, Scott founded World Wide Tele-Sports, which advertised its services in the United States and allowed gamblers to place bets on sports games via an 800 number and, later, the Internet.

The business became a cash cow for Scott and for Antigua, where such betting was legal.

Court documents tell how Scott lived on the island of St. Maarten, part of the Kingdom of the Netherlands, traveling daily to nearby Antigua, where World Wide Tele-Sports once employed up to 200 people.

But the U.S. Department of Justice viewed Internet gambling as a violation of federal law, despite its legality in other countries.

As a result, Scott was indicted in 1998 in absentia on several counts related to Internet gambling, including conspiracy to violate the federal Wire Act.

Scott renounced his U.S. citizenship in 2004, according to court documents, and Antigua refused to extradite such an influential resident.

Billy Scott was safe, for a while.

But in 2012, Scott, now an Antiguan citizen, traveled to the United States to plead guilty to three counts of international money laundering and one count of conspiracy to commit Internet gambling.

As part of the plea deal, Scott was forced to pay hefty fines and relinquish nearly $7 million in assets frozen by the U.S. government. A federal judge sentenced him to three years of supervised probation.

Scott's attorney, Juan Chardiet, claimed in a sentencing memorandum that Scott had sold World Wide Tele Sports in 2003 to an Australian company for $39 million, $15 million of which was cash.

Chardiet said the rest of the $39 million was stock, which Scott lost when the company went belly-up.

After paying his U.S. taxes, forfeiting the $7 million to the government, and paying legal fees, Scott was left with about $1 million from the sale of his online empire, Chardiet said.

In May of this year, Chardiet petitioned the court for an early termination of Scott's probation, stating that Scott, now 73 and in ill health, had "paid his $500,000 fine in full."

But federal Judge Richard J. Leon quickly denied the request, and Scott remains on probation in the U.S., apparently residing in Florida.

Part of the court record in the Scott case are letters from both Antiguans and Toledoans testifying to Scott's charitable works in the United States and in the Caribbean.

Included is a letter to the judge from Ducey's grandmother, Madeline, pleading for leniency for son Billy.

She stated that she is legally blind and that her daughter typed the letter for her.

She also attested that her only son is a good man, saying he stepped in after the loss of her husband, William, when he died of a heart attack, supporting her "completely for over 25 years."

As this story went to press, New Times and CIR still await a response from the Ducey campaign to the information uncovered showing that Ducey is the scion of a Toledo organized-crime family.

Ducey's family, including his mother and her husband, have donated about $9,184 to his campaigns for governor and treasurer. Donors from Ohio have given about $55,000 to his political efforts.

But that's dwarfed by the more than $3 million of Ducey's own fortune that he's committed to becoming governor and to the millions more spent by independent-expenditure committees and so-called "dark-money groups," which do not disclose donors.

Some of these dark-money groups have ties to the Koch brothers. And it's fair to say that they, through these groups, have more influence over the outcome of this year's gubernatorial election than anyone from the Scott side of Ducey's family.

Could Ducey be ignorant of the exploits of his relatives on his mother's side?

This seems unlikely, given the extensive documentation of their exploits in the Toledo press.

The activities of Ducey's Uncle Billy would have been, in particular, difficult to ignore, since members of Ducey's family remain in contact with Scott, to judge from Facebook.

Ducey's mom's Facebook page notes a trip she and Ducey's step-father made to the island of St. Maarten in 2011, one year before Scott's pleading guilty to Internet gambling in a U.S. court.

One photo from the trip that she posted to Facebook shows Madeline Burk, a glass of wine in her hand, arm-in-arm on the beach with brother Billy, still a fugitive from American justice.

"Saying Goodbye to my brother," she writes as a caption to the picture. "He and [his wife] Susan [are the] most incredible hosts ever!! Love & more."

You can't choose your family, goes the old saw, and that no doubt will be part of the Ducey camp's spin on this story.

Conversely, those opposed to him may see a parallel to Ducey's alliance with the Kochs or to his behavior as CEO of Cold Stone Creamery.

Some former Cold Stone store owners, for instance, have accused Ducey and Cold Stone of over-selling the company's franchises and of other dubious business practices.

Moreover, the public still does not know the full details of the company's sale to Kahala, which Ducey and other parties to the deal have kept under seal.

The secret of the misdeeds of Ducey's relatives from the Scott side of his family has proved harder to keep.

Lance Williams is money and politics senior reporter at The Center for Investigative Reporting, and Stephen Lemons is a staff writer and columnist at New Times.

Correction: An earlier version of this article reported that Billy Scott's probation was terminated by the court in May, and that he self-deported back to the Caribbean. In fact, Scott's lawyer petitioned for early termination of his probation, but a federal judge denied the request. Currently, Scott remains on probation in the United States. We regret the error.

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