Prim Capital Corp. founder Joseph Lombardo, whose firm helped manage as much as $250 million for the National Basketball Players Association, pleaded guilty to trying to defraud the organization of $3 million.
Prim was the primary outside advisory firm entrusted with the union’s investments and finances from 2001 to 2013, according to prosecutors in the office of Manhattan U.S. Attorney Preet Bharara.
Lombardo, 72, told U.S. District Judge Jesse Furman today in Manhattan that from the summer of 2011 through this year, he engaged in a scheme to defraud the NBPA by creating a fraudulent contract between the group and his company. He also said he conspired to obstruct a federal grand jury in New York.
“I and at least one other person agreed to impede and attempted to impede the grand jury,” Lombardo said. “We agreed that we would provide testimony we knew not to be true about the nature and origin of the contracts between Prim Capital and the National Basketball Players Association.”
Lombardo, who pleaded guilty to wire fraud and obstruction of the grand jury, faces from 51 to 63 months in prison when he is sentenced on March 20. Teri Washington, a spokeswoman for the union, declined to comment on Lombardo’s plea.
In May 2012, as part of a U.S. Department of Labor investigation, Prim was served with a subpoena seeking documents pertaining to agreements between the association and the firm, prosecutors said. Prim produced copies of its agreements with the union, including a purported 2011 contract listing Prim’s fee as $602,000 per year for a five-year term, prosecutors said.
The contract was signed by Gary Hall, the union’s former general counsel. Bharara said an investigation revealed that Hall’s signature wasn’t authentic and was created at Prim, months after Hall’s death in March 2011, prosecutors said.
Assistant U.S. Attorney Daniel Richenthal told the judge today that the signature was created from a stamp. He said Lombardo and an unidentified person agreed to lie to the federal grand jury in New York and that Lombardo had given false testimony when he appeared before the grand jury in February.