Golden 1 Center, Sacramento CA (Photo: Shutterstock.com)Former Sacramento Kings Exec Agrees to Plea Deal in Credit Union Fraud Case
Jeff David admits he used $9 million from Golden 1 Credit Union's stadium naming rights deal with the Kings payment to buy beachfront properties.
December 14, 2018 at 12:00 PM
3 minute read
The original version of this story was published on Law.com
A former NBA executive agreed Wednesday to a plea deal in which he admitted to diverting millions in corporate sponsorship funds, including $9 million from the $12.1 billion Golden 1 Credit Union, to pay for beachfront properties, a private jet membership and credit card bills.
Jeffrey R. David, 44, the Sacramento Kings' former chief revenue officer and a former NBA executive, is scheduled to appear before a U.S. District Court judge in Sacramento, Calif., on Dec. 26. He has agreed to plead guilty to wire fraud and aggravated identify theft.
In June 2015, the Golden 1 Credit Union signed a 20-year $110 million naming rights deal for the new arena of the NBA's Sacramento Kings, which opened as Golden 1 Center in September 2016.
On behalf of the basketball team, David negotiated the naming rights deal for the credit union to pay $6 million annually for the first three years, $5.5 million for years four through 17 and $5 million for years 18 to 20. In addition, in August 2015, David also negotiated a $28 million sponsorship deal with the Kaiser Permanente Foundation, which agreed to pay $2.8 million annually over 10 years.
Federal investigators said David exploited these agreements to his advantage by negotiating amendments with Golden 1 and Kaiser without the knowledge or authorization of the Sacramento Kings.
David later negotiated an amendment with Golden 1 to pay $9 million in the first year in exchange for lower payments during the later years. The credit union signed this amendment without knowing that the Sacramento Kings did not authorize David to negotiate it.
The former executive also negotiated an amendment with Kaiser to pay $4.4 million in the first year instead of $2.8 million. David was not authorized by the basketball team to negotiate this amendment either.
Golden 1 and Kaiser wired $13.4 million to a Sacramento Sports Partners LLC bank account, which was exclusively controlled by David. The Sacramento Kings were not aware of or authorized these financial transactions and Golden 1 and Kaiser made the wire transactions under the false pretenses that the funds were being sent to the LLC under the management of the Sacramento Kings organization.
The federal investigation uncovered that David began this scheme in 2012 when he billed a New York advertising firm $20,000 for a partnership agreement with the Sacramento Kings. The advertising firm paid Sacramento Sports Partners unaware that it was not part of the basketball organization and that David was not authorized by the Sacramento Kinds to bill the advertising firm.
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