SACRAMENTO, Calif.–A former executive of the NBA’s Sacramento Kings is suspected of siphoning off $13.4 million from two of the team’s top sponsors, including The Golden 1 Credit Union.
Authorities allege the executive used the funds to purchase beachfront property in Southern California, according to the Sacramento Bee.
The FBI and federal prosecutors are investigating Jeffrey R. David, 44, the former chief revenue officer for the Kings who currently holds the same position with the NBA’s Miami Heat, for what sources told the Sacramento Bee was a sophisticated money-laundering scheme that allegedly diverted $9 million from the Golden 1 Credit Union and another $4.4 million from Kaiser Permanente Foundation.
The Golden 1’s sponsorship agreement of more than $100 million has been a frequent target of attacks by bankers arguing the CU tax exemption is no longer justified, as CUToday.info has reported.
David’s position with the Kings was eliminated on June 1. He joined the Miami Heat as chief revenue officer in July. No criminal charges have been filed in the case, which was referred to federal investigators by the Kings a week ago, according to the Sacramento Bee.
Federal officials also declined to comment.
Statement from Team
“Last week, we alerted federal law enforcement to suspicious financial transactions involving a former Kings employee, Jeff David,” the Kings said in a statement. “That investigation is underway and (the) U.S. Department of Justice authorities began the formal process of recovering and seizing the properties involved in the investigation.
“We appreciate the swift action on behalf of the officials at the FBI and U.S. Attorney for the Eastern District of California McGregor Scott as they work to complete this investigation and we will take all appropriate action once it is complete.”
Kings attorney William Portanova confirmed to the Sacramento Bee the team went to federal officials with findings of an internal investigation and noted that because of the team’s swift actions, all assets are being recovered with no loss to the team or the two companies involved, including the credit union.
A Twenty-Year Deal
The Sacramento Bee reported that documents filed in federal court in Sacramento provide an outline of the investigation, which began Aug. 14 after a Kings employee reviewing computer files found a folder labeled “Turbo Tax” that “raised suspicions.”
“The investigation now focuses on money meant to go to the Kings as part of multi-year advertising contracts that Golden 1 and Kaiser Permanente signed with the team, including the credit union’s 20-year, $120 million naming rights deal for Golden 1 Center signed in 2015, according to two sources familiar with the probe,” the Kings reported.
David was in charge at the time of negotiating advertising contracts and corporate partnerships, the Kings said.