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No criminal charges to be filed in 38 Studios investigation

No criminal charges to be filed in 38 Studios investigation

July 29, 2016 | By Bryant Francis

The fallout from 38 Studios’ drastic shutdown in 2012 continues to play out, as Rhode Island Attorney General Peter Kilman and State Police Colonel Steven O’Donnell announced in a press conference today that no charges would be filed against government officials or former 38 Studios employees after a 4-year investigation. 

According to local news station WPRI, the two stated that no criminal activity had been found in the arrangement of a $75 million loan for the production of an MMORPG called Copernicus that was backed by Rhode Island taxpayers. Civil investigations by the State and the SEC are still ongoing, and an 8-page report from the Attorney General’s office states that charges could be brought if new information is brought to light. 

However right now, “the quantity and quality of the evidence of any criminal activity fell short of what would be necessary to prove any allegation beyond a reasonable doubt and as such the Rules of Professional Conduct precluded even offering a criminal charge for grand jury consideration,” the report states. 

The downfall of 38 Studios was a calamitous event for both the people of Rhode Island and the 200+ developers of 38 Studios and Big Huge Games, who were working on Kingdoms of Amalur: Reckoning and Copernicus. The undying legal action in this case highlights how game developers can become embroiled in local political conflicts when the risks of game financing clash with taxpayer money.

In 2014, documents submitted to the court of Rhode Island allegedly showed that 38 Studios execs knew that money from the state-backed loan wouldn’t be enough to complete Copernicus, and the ongoing SEC investigation targets Rhode Island Commerce Corporation and Wells Fargo Securities securities execs for withholding similar information from investors. 

During today's press conference, O’Donnell and Kilman’s criticized officials and executives involved in the 38 Studios deal, but ultimately said “a bad deal does not always equate to an indictment.”

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