A King’s Ransom

By Jon Coss, CEO

November 26, 2019

In one rough day in 2017, Jeff David, the former Vice President of Corporate Partnerships for the Sacramento Kings NBA team, received a probing call from a King’s HR employee, a visit from the FBI, and a frantic inquiry from his wife about their frozen bank accounts.  Mr. David’s life, which included lavish parties and multi-million homes, was about to fall apart.  He was finally paying the price for committing a crime that many small business owners have fallen victim to when their bookkeeper creates a fake company and writes them checks for “services” like marketing or maintenance that were never actually performed.

Mr. David, for his part, stole over $14 million from the Kings by funneling sponsorship payments to a business he had created for other purposes, but never used, called Sacramento Sports Partners (SSP).  Like many lazy fraudsters, he inexplicably left a digital footprint to his crimes in the form of a sloppy file system that included a file named “TurboTax” that included unusual transactions for SSP.  A diligent Sacramento Kings’ human resources employee, looking for a completely different file, stumbled across the TurboTax folder and took it upon herself to get to the bottom of what she suspected was a problem.

Mr. David’s first scam had diverted $90,000 in payments from a company that wanted to advertise inside the King’s home arena, the Golden 1 Center.  This quickly led to the only slightly-more-creative schemes of negotiating an up-front unbeknownst to the Kings $4.4 million payment (in lieu of an annual escalator on a $28 million advertising contract) from major sponsor Kaiser Permanente and a $9 million scheme to divert payments from Golden 1 Credit Union.

Because he worked both sides of the transactions, Mr. David simply negotiated payments from the sponsors that the Kings were not aware of, created two contracts (one for the sponsor and one for the Kings), and diverted the difference between the contracts to his accounts.  Neither the sponsor, nor the Kings, would know the difference if it weren’t for the infamous TurboTax file that he left behind.

When he was finally discovered, Mr. David had the temerity to think that he could avoid prison time by simply apologizing, selling the multi-million dollar homes he bought with the stolen money, and returning it to the kings.  Instead, he is currently serving a seven-year sentence in a West Virginia prison.  This scheme, and others like it, point out the need for segregation of duties when it comes to financial transactions.  Failing to do so bankrupted more than a few small businesses and damaged the trust between the Kings and their sponsors.


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