The United States Attorney’s Office for the Southern District of New York said Thursday, Oct. 7, that eighteen former NBA players have been charged with cheating the league’s Health and Welfare Benefit Plan of over $4 million.
The former players include Terrence Williams, the “lynchpin” of the operation, as well as Milt Palacio, Sebastian Telfair, Antoine Wright, Darius Miles, Ruben Patterson, Eddie Robinson, Gregory Smith, Glen “Big Baby” Davis, Jamario Moon, Alan Anderson, Tony Allen, Shannon Brown, William Bynum, Melvin Ely, Christopher Douglas-Roberts, Tony Wroten, and Charles Watson Jr..
Officials say sixteen people have been arrested as of Thursday, and nineteen people have been charged in all, with the nineteenth individual being an unknown spouse, according to the Daily Wire.
The U.S. Attorney’s Office has scheduled a news conference for Thursday at a Manhattan courthouse to discuss the indictment, which alleges that the 18 former players—and a total of 19 people, including Tony Allen’s wife Desiree—were involved in a scheme to defraud the NBA’s Health and Welfare Benefit Plan out of over $3.9 million in false claims.
According to the indictment, the plan lasted from 2017 to 2020, during which the accused athletes were reimbursed for medical procedures that never took place. Each player has been charged with one count of healthcare and wire fraud conspiracy.
According to the indictment obtained by Rolling Stone, Terrence Williams—a six-year NBA veteran who was drafted in the first round by the New Jersey Nets in 2009—”orchestrated” the scheme by offering to submit “fraudulent invoices” on behalf of the players to chiropractors, dentists, and doctors. The players, in turn, paid Williams a “kickback” when the claims for the falsified medical procedures were reimbursed by the NBA’s benefits program.
“Williams was the scheme’s lynchpin. He provided the other former players with false invoices for medical and dental procedures that they never received,” United States Attorney Audrey Strauss said at a press conference Thursday. “The defendants’ playbook involved fraud and deception… they will have to answer for their flagrant violations of the law.”
Strauss provided an overview of the scheme: “First, Williams obtained fraudulent medical and dental invoices. Second, he sent those invoices to his co-conspirators, other former NBA players. Third, the co-conspirators submitted the fraudulent invoices to the plan. Fourth, unaware that the plan was fraudulent, the plan paid most of the defendants’ claims. Fifth, in many cases, the players paid kickbacks to Williams.”
In total, $3.9 million in fake claims were filed, with the players collecting $2.5 million in reimbursements; Williams’ payment, according to Strauss, was $230,000.
“When one defendant failed to pay Williams his kickback, Williams attempted to frighten the player into re-engaging with Williams by impersonating an employee from the plan’s administrative manager in claiming that there was an issue with the player’s invoice that might require him to pay back the claim,” Strauss added.
Because of that allegation, Williams is also charged with aggravated identity theft for impersonating the administrative manager.
Gregory Smith, a former player, allegedly submitted $48k in claims for dental work done at a Beverly Hills office while playing basketball in Taiwan the week he claimed to have had the dental work. In another case, three former players filed claims for dental work on the same six sets of teeth, including root canals and crowns.
“In many instances, the defendants were not even located in the vicinity of the service providers on the dates the invoices stated they received medical or dental services,” said the Department of Justice in a statement Thursday. “In particular, GPS location information and/or documents, such as flight records, show that the defendants were in locations other than the vicinity of the medical or dental offices falsely claimed as the providers of services.”
“This industry loses tens of billions of dollars a year to fraud,” Michael J. Driscoll from the FBI said in a press conference on Thursday. “These costs are then passed on to businesses and customers. That’s a fraud we take very seriously.”