From K Street to The Strand: Sacramento Kings exec accused of stealing millions for beachfront property
Jeffrey R. David, the disgraced former Sacramento Kings executive accused of siphoning off $13.4 million from team sponsors to purchase lavish beachfront homes in Southern California, was sentenced Monday to seven years in federal prison.
In a sentencing hearing that lasted more than an hour and a half, David wiped away tears and held back sobs at times as he described the damage he had done to his wife and three young children, but he could never seem to answer the basic question: Why did he do it?
David, who made $30,000 a month as the Kings chief revenue officer and also received a yearly bonus, said during court that he believed he could purchase the homes, improve them and sell them at a profit later that would allow the Kings to be repaid in full.
“I had intended to keep the profits for my kids’ college and my retirement,” David told Senior U.S. District Judge William B. Shubb. “I didn’t want to use the principal for my family.
“I only wanted to use the profit. The principal was going to go back the the Kings.”
“It was incredibly stupid,” David added. “I’ve lost the respect that I had and I’ve lost a job and career that I loved ... When I look back I can’t believe what was going on in my head.”
Sacramento attorney Mark Reichel, who defended David along with Marc Seitles and Ashley Litwin, attorneys from Miami where David lived when the scheme was discovered, said he was “disappointed” at the sentence.
“We thought the government pushed really hard for a high sentence and the judge had to consider that,” Reichel said. “Jeff David would never commit a crime ever again. He was a delight to represent.”
David’s attorneys had been hoping for a two-year sentence, the minimum allowed, but Shubb said the crime deserved a substantial sentence and that he didn’t believe David was not after the millions he took.
“That story is not credible,” Shubb told David. “It’s not worthy of belief. I don’t believe that was his intention. It doesn’t make sense.”
Prosecutors had been asking for an 8 1/2 year sentence, but family members and friends of David’s sent Shubb 60 letters imploring him to show mercy on David, who they described as a kind, generous man who had contributed countless volunteer hours to the community.
A pastor, his in-laws and the mother of a child on the soccer team David coached all spoke to the judge before sentencing, and David spoke last, breaking down several times as he told the judge he was relieved the ordeal ended with the Kings regaining all the money he took.
“I’m happy everybody got their money back,” he said. “I’m happy I’ve come clean.”
David’s was accused of a bizarre plot in which he formed a company using forged signatures from officials at the Kings, Golden 1 Credit Union and Kaiser Permanente and convinced the sponsors to make early payments on deals he had already negotiated with them.
He sent that money into his company to purchase the homes, and said he believed he could sell them later at a profit and return the money to the Kings. David told the judge he believed he could create a phony Golden 1 account to wire the funds back to the Kings and that the team would never know.
“The accounting department and the sales department don’t talk like that,” he explained.
“Mr. David never intended for anyone to find out that he took this money,” his lawyers wrote in pre-sentencing documents. “If he did not sell the properties and return the money several years later when the Sacramento Kings expected to receive it from the sponsors he knew his fraud would be uncovered.”
His lawyers argued that David, once a rising star in NBA circles, has young children and that “his life as he knows it is now over,” factors that would lessen the chance of him re-offending.
Filings from his legal team included a memo from a psychotherapist who counseled David and his wife, Kate, and noted that “Mr. David, who would have earned a near million dollar salary, is now not employable.”
The result, Columbus, Ohio, psychotherapist Richard Fetter wrote, is that his wife must now work as the family breadwinner.
“Throughout their marriage, the couple was frugal with the income they earned when Mr. David was employed,” Fetter wrote. “They saved for retirement and lived in a modest neighborhood.
“They were not big spenders. Nor did they present themselves as elites. However, since Mr. David’s indictment, after moving back to Ms. David’s hometown, Columbus, Ohio, it has been necessary for Ms. David to return to full time work outside the home.”
David himself wrote to the judge, telling Shubb he was “more than embarrassed and ashamed.”
“This was a cataclysmic mistake,” he wrote. “It was wrong and selfish and criminal. I know that. I was very wrong to have done this. I own that.
“I am in full acceptance of my guilt, and with deep regret and shame over what I have done, I accept full responsibility for my actions and will accept the consequences that stem from those actions.”
But he also blamed outside factors for his actions, including the stress of his job, his “all-time high” alcohol use and his wife’s health problems.
He wrote that between 2011 and 2017 he drank every night and at work, and that he “enabled a culture of alcoholism at work, creating sales contests called ‘Mojito Mondays,’ ‘Wine Wednesdays’ and celebrating big sales by the staff with shots of whiskey at 9 a.m.”
“I would drink from that same bottle before any public speech and any staff-wide address I needed to make,” he added.
The Kings apparently did not care for David’s claims about alcohol, issuing a statement after court denying his description of the workplace.
”This is the first we have heard of these exaggerated claims,” the team said. “To imply a ‘culture of alcoholism’ existed is false. At no point was Jeff observed to be under the influence or have issues with alcohol while employed by the team.
“The Kings have strong workplace conduct standards in place that every employee is held to – we do not tolerate drinking during business hours or while on the job and have strict serving protocols in place for the occasional end-of-day company sponsored celebration.”
In his letter to the judge, David wrote that he was “under significant stress around the time the crime was committed.”
“I was responsible for 100 employees, generating the revenue used to both keep the company afloat and pay for the construction of a new state of the art arena,” he wrote about the effort to build the team’s new Golden 1 Center. “Simultaneously, my wife was pregnant again and we were trying to figure out how to handle three kids ages 4 and under.”
Prosecutors and Kings officials have noted that David cooperated fully with the probe once the FBI contacted him, and returned to Sacramento immediately to help investigators.
But they had argued he deserved a sentence of 8 1/2 years for his crimes, which he acknowledged in a plea agreement in December.
David’s scheme began to unravel last August, two months after David’s Kings job had been eliminated and he moved on to a similar position with the Miami Heat.
A Kings employee examining an old computer David used found a file labeled “Turbo Tax” and began poking around, eventually discovering evidence that David had created a shell company that he used to divert sponsorship money from the Golden 1 Credit Union and Kaiser Permanente.
David told the sponsors they were making early payments on years-long sponsorship deals and would not have to pay as much at the end of the deal, court documents say. Instead, after forging signatures of team officials to help with the scheme, he used the money to purchase homes in Manhattan Beach and Hermosa Beach, and also used the money to pay off a credit card account and use a private jet service.
Federal officials seized the homes and eventually sold them at a profit, returning all of the money to the team earlier this year.