Former NBA union financial adviser gets one-and-a-half years prison for fraud

Tue Jun 10, 2014 2:38pm EDT
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By Joseph Ax

NEW YORK (Reuters) - The founder of an Ohio firm that managed the finances of the National Basketball Association players union was sentenced on Tuesday to 1-1/2 years in prison for forging a $3 million contract and then lying about it to a grand jury.

Joseph Lombardo, the founder of Prim Capital Corp, had pleaded guilty in November to mail fraud and conspiracy to obstruct justice.

"At 73 years old, the last place I ever thought I'd be was in a federal courthouse, about to be sentenced by a federal judge for stupid, arrogant and criminal acts," Lombardo said at a hearing before U.S. District Judge Jesse Furman in Manhattan federal court. "I know what I did was wrong."

Michael Koenig, a lawyer for Lombardo, had asked the judge not to impose a prison sentence, saying his client did not profit from the fraud and had otherwise led an exemplary life.

But Furman said the reprehensible nature of the crimes, including lying to a grand jury and convincing co-defendant Carolyn Kaufman, president of Prim's advisory services business, to do the same, justified imprisonment.

Based in Independence, Ohio, Prim was once the primary outside investment adviser for the NBA Players Association, managing up to $250 million of union assets.

In 2011, the U.S. Department of Labor began investigating the union and its then-executive director, Billy Hunter. The union subsequently ordered its own outside audit, which found Hunter had mismanaged the union's finances but stopped short of accusing him of criminality.

Hunter was fired in February 2013. His lawyer did not immediately comment on Tuesday.   Continued...