SACRAMENTO, Calif.–A former executive with the NBA’s Sacramento Kings has pleaded guilty to stealing money from two of the team’s top two sponsors, one of which is The Golden 1 Credit Union.
As CUToday.info originally reported here, The Golden 1 Credit Union has entered into a 20-year, $120-million naming rights deal with the team, whose new arena is called The Golden 1 Center.
That deal was negotiated by Jeffrey R. David, the team’s former chief revenue officer, who pleaded guilty to stealing approximately $13.4 million and using it on beachfront homes and other personal expenses. In addition to The Golden 1, funds were also siphoned from sponsorship money paid by Kaiser Permanente, according to the Sacramento Bee.
David, 44, is expected to enter his guilty plea in a Sacramento federal courtroom in January, where prosecutors are likely to call for a sentence of 8 1/2 years, the Bee reported. The alleged theft was discovered after David left the Kings to move to a similar position with the Miami Heat, a job he exited after the Bee reported the FBI investigation of the potential theft from the Kings.
The Sacramento Bee reported the investigation moved quickly once the Kings took their findings to federal officials, with prosecutors filing forfeiture documents in court within days to prevent either property from being sold or transferred. Prosecutors filed 11 counts of wire fraud, money laundering and aggravated identity theft, with the agreement calling for David to plead guilty to one count of wire fraud and one count of aggravated identity theft. The wire fraud count is punishable by a sentence of up to 20 years; the identity theft count requires the court to impose a sentence of at least two years, the Bee reported.
According to the Bee, an employee with the NBA team was reviewing computer files left behind by David found a folder labeled “Turbo tax” and began investigating. The team ultimately found evidence that $9 million from the Golden 1 naming rights deal and $4.4 million from Kaiser Permanente had been diverted to an entity called Sacramento Sports Partners.
“David created the company in 2009, then converted it to a limited liability corporation in 2015, and federal investigators believe he used that firm’s bank accounts to transfer the money and eventually purchase two homes in Southern California,” the Bee reported. “Federal officials moved to seize the properties, but allowed them to be sold in recent months for a total of nearly $14.8 million. After deducting Realtor costs and other fees, the team expects to recoup the entire amount it lost.”
The scheme is believed to have run from 2012-2016 and began by taking money from smaller sponsors, prosecutors said.
“Following these initial successes, David targeted higher value sponsors of (the Kings) to defraud,” state court documents cited by the Bee, “leading him to Golden 1, which had negotiated a naming rights deal for the team’s new downtown arena, and to Kaiser Permanente.”
Prosecutors said David forged signatures of Golden 1 and Kaiser Permanente officials, and in addition to using stolen funds to purchase houses, also made improvements on the homes, paid $100,000 to a private jet company and “paid tens of thousands of dollars in personal credit card bills” to American Express.