Eighteen former NBA players were charged with pocketing about NZ$3.6 million illegally by defrauding the league's health and welfare benefit plan in a scam that authorities said involved claiming fictitious medical and dental expenses.
"The defendants' playbook involved fraud and deception," U.S. Attorney Audrey Strauss told a news conference after FBI agents across the country arrested 15 ex-players and one of their wives in a three-year conspiracy that authorities say started in 2017.
According to an indictment returned in Manhattan federal court, the ex-players teamed up to defraud the supplemental coverage plan by submitting fraudulent claims to get reimbursed for medical and dental procedures that never happened.
Strauss said prosecutors have travel records, email and GPS data that proves the ex-players were sometimes far from the medical and dental offices at the times when they were supposedly getting treated.
In one instance, she said, an ex-player was playing basketball in Taiwan when he was supposedly getting $69,000 worth of root canals and crowns on eight teeth at a Beverly Hills, California, dental office in December 2018.
The indictment said the scheme was carried out from at least 2017 to 2020, when the plan — funded primarily by NBA teams — received false claims totaling about $5.6 million. Of that, the defendants received about $3.6 million in fraudulent proceeds.
Strauss said each defendant made false claims for reimbursements that ranged from $94,000 to $605,000.
A request for comment to the league wasn't immediately returned.
United States Attorney for the Southern District of New York Audrey Strauss speaks during a news conference. Photo / AP
Michael J. Driscoll, the head of New York's FBI office, said the case demonstrated the FBI's continued focus on uncovering health care fraud scams that cost the health care industry tens of billions of dollars a year.
Strauss said the conspiracy was led by Terrence Williams, who began his career as a first-round NBA draft pick in 2009. The indictment said he submitted $27,000 in fraudulent claims to the plan in November 2017 for chiropractic care. The claims led to a $11,000 payout for Williams.
The indictment said he then recruited other former NBA players to defraud the plan and offered to provide fraudulent invoices from a chiropractor and dentist in Southern California and a wellness office in Washington state.
At least 10 of the ex-players paid kickbacks totaling about $331,000 to Williams, according to the court papers. A lawyer who has represented Williams in the past declined to comment.
What was then the New Jersey Nets picked Williams as No. 11 in the 2009 draft. He went on to play with four franchises — the Nets, Boston, Houston and Sacramento — over four seasons as a role player, averaging 7.1 points per game. He was waived by Boston two days after his 26th birthday in 2013 and hasn't appeared in the league since.
Among others charged was Tony Allen, a six-time All-Defensive team selection and a member of the 2008 champion Boston Celtics. His wife was also indicted. Tony Allen was not in custody as of Thursday afternoon.
For the most part, though, the ex-players charged had journeyman careers playing for several different teams and never reached anywhere close to the enormous stardom or salary that top players command.
Still, the 18 players combined to make $494 million in their on-court NBA careers, not counting outside income, endorsements or what any may have made playing overseas.
Strauss declined to speculate on their motivations or financial situations, saying to do so would go beyond the facts in the indictment.
Another former player charged in the scheme was Sebastian Telfair, a one-time high school star in New York who was highly touted when he turned pro, though his NBA career with eight franchises never brought the stardom some had expected.
Those charged also included four NBA champions. Glen Davis, along with Allen, was part of that 2008 title team in Boston. Shannon Brown won two championships with the Los Angeles Lakers, and Melvin Ely won a title with San Antonio in 2007.
Among others who were charged, Anthony Wroten, Ruben Patterson and Darius Miles were the only players who averaged double figures for their NBA career.
Wroten averaged 11.1 points in 145 career games. Patterson averaged 10.7 points per game with six different teams. Miles, the No. 3 pick in the 2000 draft, averaged 10.1 points per game and played with four different franchises.