Former Kings executive expected to plead guilty today in $13.4 million scheme
Former Sacramento Kings executive Jeffrey R. David is expected to walk into federal court in Sacramento Tuesday morning and formally enter a guilty plea to charges that he diverted $13.4 million from team sponsors and used the money to buy beachfront property in Southern California.
David, 44, was the chief revenue officer for the NBA franchise from August 2011 through 2017, and later served in the same role briefly for the Miami Heat.
But the FBI and federal prosecutors began investigating David last August after a Kings employee found unusual entries on an old computer David had used, a discovery that led to David facing 11 counts of wire fraud, money laundering and aggravated identity theft.
The charges were filed Dec. 12, the same day that David signed a plea agreement with prosecutors under which he is expected to plead guilty to one count of wire fraud and one count of aggravated identity theft.
David is scheduled to appear before U.S. District Senior Judge William B. Shubb at 9 a.m. Tuesday to face arraignment and enter his plea.
He will face sentencing later in the case, which could net a 20-year sentence for the wire fraud charge. The aggravated identity theft charge requires the judge to impose a sentence of at least two years.
Prosecutors are expected to argue for a sentence of 8 1/2 years, while David’s attorneys are expected to argue that he deserves no more than two years.
Sacramento defense attorney Mark Reichel has argued that once investigators contacted David he “agreed to cooperate fully and completely” and that no money was lost as a result of David’s actions.
“He understands what he did was wrong,” Reichel said in December.
David was a rising star in the NBA, having worked in the league headquarters office in its global marketing partnerships group before then-Commissioner David Stern dispatched him to Sacramento to serve as chief revenue officer while the team was going through an ownership change and planning to build Golden 1 Center downtown.
In his role with the Kings, David helped negotiate contracts with some of the team’s biggest sponsors, including the Golden 1 Credit Union and Kaiser Permanente.
The Golden 1 naming rights deal for the new arena was a $110 million contract spread over 20 years, and court papers say that after the deal was struck David went back to the credit union and suggested that it make an initial $9 million payment up front rather than the $6 million agreed upon for the first year, with David explaining that later payments would then be lower.
He allegedly made a similar pitch to Kaiser Permanente, diverting $4.4 million from that sponsor.
Authorities believe David forged signatures of officials from both Golden 1 and Kaiser and siphoned off $13.4 million that he used to purchase beachfront homes in Hermosa Beach and Manhattan Beach. He also used funds to pay $100,000 to a private jet company and paid off tens of thousands of dollars in American Express bills, court documents say.
David’s job with the Kings was eliminated last June 1, and he accepted a similar job in Miami a month later. He left that job after the federal probe was revealed by The Sacramento Bee in August.
Officials say the scheme was discovered by a team employee who became suspicious while going through old files on David’s computer and discovered a folder labeled “Turbo Tax” and depreciation schedules for two homes, furniture and a golf cart.
Federal agents placed liens on the homes, which subsequently were sold for nearly $14.8 million. Officials say they believe proceeds from the sales will recoup all the funds David is accused of diverting.
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