Little league falls victim to bankrupt company

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Thousands of families paid registration fees to this online company, and never saw that money again. Some very popular sports programs in the Bay Area lost big money, and it almost killed the season for a group of kids who just want to play ball.

It's springtime in San Jose's Blossom Valley. For these boys, that means one thing -- time to play ball. The shadows grow long, it is way past dinnertime, but the boys keep playing.

Pony Baseball is a 30-year tradition in Blossom Valley, but this year it was almost out at the plate.

"Well, first reaction was anger. Really stealing from kids is kind of we got the common reaction that this company is stealing from our kids," said Blossom Valley Pony Baseball President Greg Figueroa.

The company is Count Me In of Bellevue, Washington. It was hired to manage the online registration for Blossom Valley's 550 players.

Count Me In collected the registration fees all right but never turned the money over to Pony Baseball. The kids lost a huge amount -- $30,000 is gone.

"It was like, uh-oh, you realize right away we had problems," said Chris Heck from Blossom Valley Baseball.

"We've asked for our money and they said we can't pay it back," said Figueroa.

The funds were supposed to pay for field repairs, new uniforms, bleachers, field rentals; the whole season.

"This is our life in the springtime to take that away, I guess I don't know what people would do," said Figueroa.

"We would pretty much stay at our house and do nothing hate ourselves," said Blossom Valley baseball player Anthony Fagiano.

"That's what's really sad about this. It's taking away from kids," said Heck.

So they called 7 On Your Side and we found out the pony league is far from alone.

Hundreds of programs all across the country also lost registration fees to Count Me In. Among them are San Francisco's Acro Sports Gymnastics School, Alameda Education Foundation and the Marine Science Institute of Redwood City.

In all, 127 clubs filed complaints with the Washington State Attorney General. Count Me In admits it owes $5 million to 220 clubs.

"It hurts, it's not right. Not fair," said Blossom Valley coach and parent Dave Donnelly.

"Potentially keeping kids from playing the game they love is, somebody should be punished," said Figueroa.

"Hopefully we can get our money back and play baseball and have fun," said Blossom Valley player Luke Andrews.

But Count Me In is now in Chapter 7 bankruptcy. All those clubs will have to stand in line to claim their money.

So what happened to all those millions?

7 On Your Side contacted Count Me In owner terry Drayton. He did not agree to speak on camera, but he said that money was used for his own business expenses like salaries and software, and admits that should never happen.

He said: "most of the funds were used to enhance the software. That's the kind of stuff you shouldn't do. We did not have any understanding of the liability, what's involved in handling client funds. You would never want to handle client funds.''

As for putting children's programs in jeopardy Drayton said: "That's the last thing I could ever have wanted to happen.''

That comes as little comfort for these kids.

But here's what helped -- families stepped up to the plate repaired their own fields, raised money for uniforms and coached their own teams.

"I've been playing baseball since I was five so I'm not about to quit," said Fagiano.

"Everybody volunteers and contributes that's really the strength of the league," said Blossom Valley coach and parent Dave Donnelly

"We're not going to let the league go under we're going to step up," said Figueroa.

In spite of Count Me In, they won't be counted out.

It's a great bunch of kids but the season's just starting and the league is almost out of cash. So families are organizing a fundraiser and can use your help.