Financial adviser convicted of obstructing NBA union contract probe

Wed Dec 11, 2013 5:33pm EST
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By Nate Raymond

NEW YORK (Reuters) - A principal at an investment advisory firm that did business with the National Basketball Association's players union was found guilty on Wednesday of obstructing a grand jury investigating those dealings.

Carolyn Kaufman of Prim Capital Corp was found guilty by a federal jury in Manhattan of perjury, obstruction and conspiracy to obstruct justice.

Prosecutors accused Kaufman, 72, of lying to a grand jury about a forged $3 million contract between Prim and the union, which at the time was being investigated by the U.S. Department of Labor.

The verdict came a month after Prim founder Joseph Lombardo, also 72, admitted to defrauding the union and pleaded guilty to mail fraud and conspiracy to obstruct justice.

Steven Molo, Kaufman's lawyer, said he was disappointed with the verdict. "We believe the evidence did not support it and plan to appeal," he said.

Prim, based in Independence, Ohio, from 2001 to 2013 was the primary outside investment adviser for the National Basketball Players Association, assisting in managing up to $250 million of the union's assets.

According to prosecutors, the Labor Department in 2011 began probing the union and then-Executive Director Billy Hunter, and subpoenaed Prim.

Upon learning that the union would make public the results of an internal investigation, Prim turned over a purported contract showing annual fees over five years of $602,000 and signed by former NBPA general counsel Gary Hall.   Continued...