Prison sentence handed down. (Source: Shutterstock)
A U.S. District Court judge in Sacramento, Calif. sentenced former sports executive Jeffrey R. David to seven years in prison Monday for stealing millions in corporate sponsorship funds, including $9 million from the $12.7 billion Golden 1 Credit Union, to pay for beachfront properties, a private jet membership and credit card bills.
His defense attorneys asked Judge William B. Shubb to give David only two years. They argued there was no "actual or intended financial loss" because he invested the stolen funds in properties that were valued at equal to the amount or more than the $13.4 million in sponsorship money from California's second largest credit union and the Kaiser Permanente Foundation. The funds were supposed to be paid to the Sacramento Kings for naming rights and sponsorship deals negotiated by David.
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In May, the NBA basketball team received $13.2 million from the sale of the properties, while the remaining restitution balance is expected to be paid to the team after a court-ordered criminal forfeiture.
"Here, Mr. David intended to repay the money to the Sacramento Kings," David's lawyers wrote in court documents. "He intended to make a profit and return the original 'investment' to the Sacramento Kings to evade discovery."
But prosecutors argued there was no evidence to support these self-serving assertions and ran contrary to David's extraordinary and brazen efforts to steal millions through the sophisticated execution of a major corporate fraud scheme.
"His conduct merits a substantial sentence of imprisonment," prosecutors wrote in court documents, asking the judge to impose a nine-year sentence.
David, 44, of Columbus, Ohio, was the Sacramento Kings' former chief revenue officer and a former NBA executive.
In June 2015, the Golden 1 CU 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 with the credit union and a sponsorship agreement with Kaiser. He later exploited these deals, however, by later negotiating amendments with Golden 1 and the medical group without authorization from the Kings.
According to court documents, David convinced Golden 1 to pay $9 million in the first year in exchange for lower payments during the later years of the naming rights deal. He forged the signature of Golden 1 CU President/CEO Donna Bland and the Kings' president on the amendment. He also negotiated a similar amendment with Kaiser worth $4.4 million and forged the signatures of its CEO and the basketball team's president.
Golden 1 and Kaiser wired $13.4 million to a Sacramento Sports Partners LLC bank account, which was exclusively controlled by David.
Federal investigators also 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 the former executive was not authorized to bill the advertising firm.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
