Crime - Sacto 911

Former Kings executive pleads guilty in multimillion-dollar fraud scheme

Then-Kings executive Jeff David, far left, talks to radio host Grant Napear before the Kings play the Indiana Pacers on Friday, Jan. 24, 2014, at Sleep Train Arena. At right, then-team President Chris Granger talks to minority owner Mark Mastrov, center. David pleaded guilty Tuesday in federal court in Sacramento to diverting $13.4 million from team sponsors.
Then-Kings executive Jeff David, far left, talks to radio host Grant Napear before the Kings play the Indiana Pacers on Friday, Jan. 24, 2014, at Sleep Train Arena. At right, then-team President Chris Granger talks to minority owner Mark Mastrov, center. David pleaded guilty Tuesday in federal court in Sacramento to diverting $13.4 million from team sponsors. hamezcua@sacbee.com

Jeffrey R. David, the former Sacramento Kings executive and rising NBA star who schemed to steal $13.4 million from the franchise and sponsors to snatch up exclusive beachfront properties, pleaded guilty Tuesday to two counts of wire fraud and aggravated identity theft in Sacramento federal court.

David, 44, will be sentenced April 15 before U.S. District Court Judge William B. Shubb. He remains free on his own recognizance pending the April sentencing date.

A stone-faced David stood before Shubb between his lawyers, Marc David Seitles and Mark Reichel, as Deputy U.S. Attorney Matthew Yelovich laid out the nearly five-year scheme to divert the millions from five team sponsors to buy homes in Hermosa Beach and Manhattan Beach.

David admitted directing companies to wire money to the limited liability corporation he formed, Sacramento Sports Partners – one sent more than $4 million to the sham account – while he was the franchise’s chief revenue officer. He admitted forging the signatures of corporate officials, using funds to pay off American Express bills and pay $100,000 to a private jet company.

David was the team’s chief revenue officer from August 2011 through 2017. He later served in the same role for the NBA’s Miami Heat and had worked in the league’s headquarters before then-NBA Commissioner David Stern sent him to Sacramento to be the Kings’ chief revenue officer while the franchise was navigating a change in ownership and planning to erect Golden 1 Center in downtown Sacramento.

But David’s undoing came when the FBI and federal prosecutors began investigating him last August after a Kings employee found unusual entries on an old computer he had used. That discovery of a computer folder labeled “Turbo Tax” led David to face 11 counts of wire fraud, money laundering and aggravated identity theft.

David was sacked June 1, took the Miami post in July and left that position after the federal investigation was revealed by The Sacramento Bee in August.

The Tuesday plea deal saved David a grand jury indictment on a host of other federal charges tied to the operation, but his fate remains unknown. He could face a maximum sentence of 20 years in federal prison for wire fraud and another two years for ID theft, and be forced to pay $500,000 in fines. However, Shubb said he will wait for a federal probation report before determining David’s punishment.

Prosecutors are expected to argue for an 8 1/2-year sentence. David’s lawyers are expected to push for a much lighter sentence of no more than two years.

“He understood what he did was wrong,” Reichel said in December.

As part of the plea, the former executive will pay back the $13.4 million he stole, Reichel and Seitles said. The properties have been seized by authorities and the proceeds are being held to repay David’s victims.

Yelovich said the parties continue to work out the properties’ sale and forfeiture of proceeds, saying talks were “still ongoing.”

After the hearing, Seitles said, “All victims will be made whole. The money will be returned to the Sacramento Kings and Golden 1.”

David declined to speak with a reporter, but sought out Kings attorney William Portanova. The pair shook hands and briefly exchanged words before David’s attorneys led him to an elevator to the U.S. marshal’s office.

The Sacramento Kings in a short statement after the plea hearing said they applauded the work of Sacramento federal prosecutors and the FBI “for their continued efforts to quickly bring Jeff David to justice and ensure all assets owed to the Kings have been recovered in full.”

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