A former Sacramento Kings executive allegedly used $13.4 million in sponsorship money to purchase beach houses, according to a report from The Sacramento Bee. It’s a detailed report that we’ll share some of, but I’d encourage you to read the whole thing. 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 say 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. David, whose position with the Kings was eliminated on June 1 and who joined the Miami Heat as chief revenue officer in July, did not respond to a message seeking comment that was left on his cellphone voice mail early Thursday. No criminal charges have been filed in the case, which was referred to federal investigators by the Kings a week ago. According to the Bee, the Kings stumbled onto the scheme while holding a scheduled internal audit through a folder named “Turbo Tax” on a team computer, conducted a swift internal investigation, and quickly involved the FBI. To summarize the scheme, David contacted sponsors offering a discount in the future if they paid a larger amount up front. The sponsors, having dealt with David before (again he was in charge of these kind of things) never realized anything was suspicious and agreed to the payments. He then diverted that money to buy beach houses which he remodeled and intended to sell at a markup. Since the current payments would still be coming in as usual and nobody at the Kings but David knew about these additional payments, there wouldn’t be any red flags in accounting for years. He probably could have gotten away with it if he hadn’t kept evidence on work computers and if the Kings hadn’t been so thorough with their computer audit. Your interpretation may vary but to me this doesn’t necessarily reflect poorly on the organization, but rather on a greedy man who overreached and bit off more than he could chew. We’ll update if any additional information comes in.<doc-sep>Hide Transcript Show Transcript WEBVTT MAX: GOOD EVENING. THOSE FEDERAL COURT DOCUMENTS STATE JEFF DAVID TOOK ADVERTISING DOLLARS FROM THE SACRAMENTO KINGS AND USE THAT MONEY AND PART OF AN ELABORATE SCHEME TO BUY HOMES. THE KINGS SAY THEY ALERTED FEDERAL LAW ENFORCEMENT LAST WEEK ABOUT SUSPICIOUS FINANCIAL ACTIVITY. COURT DOCUMENTS DESCRIBE THE FEDERAL GOVERNMENT’S ATTEMPT TO SECURE TWO PROPERTIES PURCHASED THROUGH FRAUD AND MONEY LAUNDERING. THE DOCUMENTS SAY THE PERSON, SOMEONE WE’VE CONFIRMED IS FORMER KINGS EXECUTIVE JEFF DAVID, BOUGHT TWO LOS ANGELES AREA PROPERTIES NEAR THE BEACH USING STOLEN FUNDS. THE DOCUMENTS SAY THAT IN 2015 DAVID FORMED AN LLC CALLED SACRAMENTO SPORTS PARTNERS LLC. THE SAME YEAR, THE KINGS ENTERED INTO ADVERTISING AGREEMENTS WITH GOLDEN ONE CREDIT UNION AND KAISER PERMANENTE, OVERSEEN BY DAVI RECORDS STATE, IN THESE AGREEMENTS, DAVID’S COMPANY BILLED GOLDEN ONE AND KAISER FOR ADVANCED PAYMENTS, SAYING IT W AN OPPORTUNITY TO MAKE AN EARLY LUMP SUM PAYMENT IN EXCHANGE FOR OWING LESS MONEY LATER. IN JULY 2016, DOCUMENTS SHOW DAVID USED THOSE ADVANCED PAYMENTS TO BUY HIS FIRST PROPERTY, THEN REMODEL IT. AND ONE YEAR LATER, DAVID BOUGHT A SECOND HOME USING THOSE SAME ADVANCED PAYMENTS. IN TOTAL, THE ATTORNEY FOR THE KINGS SAYS DAVID DIVERTED $13.4 MILLION. AND THE TEAM RELEASED TH STATEMENT SAYING IN PART, QUOTE, LAST WEEK, WE ALERTED FEDERAL LAW ENFORCEMENT TO SUSPICIOUS FINANCIAL TRANSACTIONS INVOLVING A FORMER KINGS EMPLOYEE, JEFF DAVID. THAT INVESTIGATION IS UNDERWAY AND ON MONDAY, US DEPARTMENT OF JUSTICE AUTHORITIES BEGAN THE FORMAL PROCESS OF RECOVERING AND SEIZING THE PROPERTIES INVOLVED IN THE INVESTIGATION DAVID IS CURRENTLY WITH THE MIAMI HEAT IN THE SAME POSITIO THE HEAT RELEASED A STATEMENT. IT SAYS, QUOTE, WE ARE AWARE OF THE INVESTIGATION OF JEFF DAVID, WHICH FOCUSES ON EVENTS THAT TOOK PLACE PRIOR TO HIS JOINING OUR TEAM. WE ARE FULLY COOPERATING WITH THE AUTHORITIES. JEFF DAVID IS ON LEAVE, PENDING THE OUTCOME OF THE INVESTIGATION, END QUOTE WE WERE UNABLE TO REACH JEFF DAVID, BUT WE DID SPEAK TO HIS FAMILY OVER THE PHONE. THEY DID NOT WANT TO MAKE A STATEMENT, BUT WERE CLEARLY GRAPPLING WITH Advertisement Former Kings executive under federal investigation Share Shares Copy Link Copy The Sacramento Kings said Thursday that federal authorities are investigating a former top executive after team officials uncovered suspicious financial transactions.The Kings said the FBI and federal prosecutors took formal action Monday to recover money former chief revenue officer Jeffrey David is suspected of embezzling. David holds the same position with the Miami Heat after leaving the Kings in June.“Last week, we alerted federal law enforcement to suspicious financial transactions involving a former Kings employee, Jeff David," a statement from the Sacramento Kings reads. "That investigation is underway and on Monday, US 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 US 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.” The U.S. Attorney's office in Sacramento declined to comment and the team provided no other details. No charges have been filed. The FBI would neither confirm nor deny an investigation when asked for comment.Court documents obtained by KCRA 3 show David entered into advertising agreements with two companies in which he promised lower payments toward the end of their contracts in exchange for lump sums up front.Those companies, according to documents from the Secretary of State’s Office, are Golden 1 Credit Union and Kaiser Permanente. They’re listed as co-managers of Sacramento Sports LLC, an LLC created by David to divert the money, the court documents say.The court filing says David took those advanced payments and bought two beach homes in the Los Angeles area in 2016 and 2017.Bill Portanova, an attorney for the Kings, said David diverted $13.4 million from those advanced payments for the properties. “Due to the swift response by the team, FBI and U.S. Attorney’s office, (the funds) are in the process of being recovered,” he said. Portanova said they expect there to be no loss of the funds whatsoever.In statements, Kaiser Permanente and Golden 1 Credit Union said they are cooperating in the investigation. "All Golden 1 member accounts are safe, and there is no impact to any of their accounts," the credit union said in a statement.The Heat also said they are cooperating with the investigation and have put David on leave.“We are aware of the investigation of Jeff David, which focuses on events that took place prior to his joining our team," a statement from the Heat said. The NBA said it is aware of the investigation and has been in contact with the Kings and Heat and with authorities. "We will continue to monitor for any developments," the NBA said in a statement.KCRA 3 reached David’s family by phone, but they did not want to make a statement. David's Miami-based attorneys said Thursday night that he is cooperating with law enforcement.The Heat hired David in July, with team president of business operations Eric Woolworth calling him "supremely qualified" to help the franchise.David has spent more than a decade in the NBA. Former NBA Commissioner David Stern appointed him in 2012 to serve as the Kings' chief revenue officer.The Associated Press contributed reporting to this story.<doc-sep>
The FBI is investigating a former Sacramento Kings chief revenue officer who allegedly stole a combined $13.4 million from two team sponsors and used the funds to buy prime real estate in Southern California, a person with knowledge of the situation confirmed to USA TODAY Sports. The person spoke on the condition of anonymity because of the sensitive nature of the situation. Jeff David, 44, currently is chief revenue officer for the Miami Heat. According to the Sacramento Bee, which first reported the story, David has been placed on leave by the Heat due to the investigation. “Last week, we alerted federal law enforcement to suspicious financial transactions involving a former Kings employee, Jeff David,” the Kings said in a statement to USA TODAY Sports. “That investigation is underway and on Monday, US 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 US 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.” David, who handled corporate sponsorships and advertising contracts, held his position with the Kings from 2011 to June 1, when the position was eliminated. He was hired by the Heat soon thereafter. The alleged scheme, which was discovered by a team employee about two weeks ago, involved the Golden 1 Credit Union and Kaiser Permanente. In 2015, the Kings signed a 20-year, $120 million naming rights deal with Golden 1 for the Golden 1 Center. “We are aware of the situation involving Jeff David and have been in contact with the Kings and Heat organizations as well as law enforcement,” NBA spokesman Mike Bass said. “We will continue to monitor for any developments.” Follow Amick on Twitter @sam_amick