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.

Served Subpoena

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.

Compiled Evidence

Richenthal also told the court that the government had compiled evidence against Lombardo that included “recordings in which Mr. Lombardo is attempting to or sought to influence the testimony of other individuals during the winter of this year with respect to the contract” between Prim and the NBPA.

In court today, Lombardo and prosecutors didn’t name the person he allegedly conspired with. Lombardo and Carolyn Kaufman, a Prim principal who served as president of the company’s advisory services unit, were charged in a criminal complaint unsealed in April.

Kaufman has pleaded not guilty to the charges and faces trial Dec. 2. Steven Molo, a lawyer for Kaufman, didn’t return a call seeking comment on Lombardo’s plea.

‘Good Man’

“Joseph Lombardo is a good man who made a series of unfortunate decisions, including to this matter for which he is now paying a steep emotional and professional price,” his lawyer, Michael Koenig, said after the hearing. “By admitting his conduct and fully accepting his responsibility for his actions, he can now begin to repair and fully restore his reputation.”

Koenig said that his client has no cooperation agreement with the government, and will seek leniency at sentencing.

Lombardo’s arrest followed months of turmoil at the union, whose members in February voted to fire Executive Director Billy Hunter after an independent investigation found that the former federal prosecutor put his own interests ahead of the union’s member players.

Hunter’s son, Todd, was a principal at Prim Capital. Billy Hunter in January purged family members from union roles after the investigation conducted by the New York law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP was critical of nepotism at the organization.

Family Members

The New York-based union paid almost $4.8 million to Hunter’s family members and their professional firms since 2001, according to public records. Billy Hunter also severed ties with Prim.

The investigation concluded that Hunter didn’t do anything illegal.

Bharara’s office started investigating the union after the association’s president, Derek Fisher, called for a review of business practices, including nepotism. Hunter, a former National Football League player, ran the union since 1996.

The case is U.S. v. Lombardo, 13-01072, U.S. District Court, Southern District of New York (Manhattan)