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May 25 — A former NBA player has been indicted by the Department of Justice for allegedly using a charity he founded to defraud donors, including other former professional athletes, into paying for his own personal expenses ( United States v. Washington, W.D. Mo., No. 4:16-cr-00171, indictment 5/23/16 ).
According to a May 25 DOJ news release, Kermit Washington, who played professional basketball from 1973 to 1988, used his charity—Project Contact Africa (PCA)—to induce individuals to make donations that he later diverted to pay his rent and for vacation expenses and other personal items.
Washington, who was arrested May 24 in Los Angeles, was charged with corruptly interfering with internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft.
According to the DOJ, Washington also used his charity to defraud EBay Inc. and PayPal Holdings Inc. by allowing co-conspirators to use PCA's name, tax-exempt status and Internal Revenue Service employee identification number so the individuals could avoid substantial listing and registration fees incurred in operating online, for-profit businesses.
Washington's charity was also used by Ron Mix, a former professional football player and attorney, who in exchange for referrals, made payments to the charity and claimed the payments as charitable deductions on his personal tax returns (100 DTR K-2, 5/24/16).
“The federal indictment alleges this former NBA player used his celebrity status to exploit the good intentions of those who donated,” said U.S. Attorney Tammy Dickinson, adding that Washington profited by diverting hundreds of thousands of dollars in donations that were supposed to benefit a clinic in Africa for needy families and children.
If convicted, Washington faces a statutory maximum sentence of three years in prison for interfering with IRS laws, 20 years for conspiring to commit wire fraud, 20 years for obstruction and a mandatory two-year sentence for aggravated identity theft.
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Text of the indictment is at http://src.bna.com/fkk.
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