Two arrests in plot to scam NBA union out of $3M
Federal law enforcement agents arrested two principals of an Ohio-based investment banking company Thursday and charged them with trying to bilk the union that represents NBA players of $3 million by creating a bogus contract for services, officials said.
"Joseph Lombardo faked the signature of a dead man as part of manufacturing a multimillion-dollar contract out of whole cloth that, had it been enforced, would have caused significant losses for basketball players who entrusted him with their savings," Bharara said in a statement.
Lombardo, managing director of Prim Capital Corp., is charged with attempted wire fraud, attempted mail fraud and obstruction of justice, officials said. The company's director, Kaufman, faces one count of obstruction of justice, prosecutors said.
Lombardo and Kaufman are scheduled to appear in U.S. District Court in Manhattan on May 2. Their attorneys could not be reached for comment.
Federal prosecutors said that in January, Lombardo gave investigators from the federal Department of Labor a 2011 contract that said Prim would provide various financial services to the National Basketball Players Association for five years at a cost to the union of $602,000 per year.
But investigators said that contract was false because it contained the forged signature of Gary Hall, the former NBPA general counsel, who died in March 2011.
In addition, prosecutors said, Lombardo and Kaufman lied under oath to a grand jury handling the case.