paid little league umps banned

[noleump]

Our little league district have chosen not to use some of their veteren umpires for alstar season, because they were paid through an umpire agency.
I was told that little league policy was that it was ok if you recieved gift certificates from leagues within the district from honigs ,outback, and duffys for services as an umpire. After more investigation almost all of the district staff had recieved gift certificates. This is my question for any who read this thread. Isnt being paid through a gift an ilegall act called fraud and being paid through an organization then the umpires recieving a 1099 form at the end of the year a legall way of paying them?Does little league have this one backwards?