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The Canadian Press - ONLINE EDITION

Ohio finance adviser gets 18 months in prison for $3M fraud against NBA Players Association

Posted: 06/10/2014 11:49 AM | Comments: 0

Last Modified: 06/10/2014 1:43 PM

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NEW YORK, N.Y. - An investment adviser was sentenced to 18 months in prison for creating a fake contract with the NBA players' union that included a dead man's forged signature.

U.S. District Judge Jesse Furman imposed the sentence on Joseph Lombardo after rejecting defence arguments that his crime didn't constitute fraud because there was no financial harm to the National Basketball Players Association.

The forged signature alone "is fraud, pure and simple," Furman said in federal court in Manhattan.

Lombardo, 73, of Gates Mills, Ohio, pleaded guilty last year to charges of mail fraud and hindering the investigation by lying to a grand jury.

The founder and former chief executive of Prim Capital Corp. told the judge on Tuesday that he regretted "stupid, arrogant and criminal acts" that left a successful career in ruins.

"There's no excuse for what I did," he said. "I should have known better."

Prim Capital had managed up to $250 million of the union's assets, reviewed individual players' investments and conducted financial seminars for players for more than a decade. Fearing that the union was seeking to fire the firm amid a federal probe of its finances, Lombardo concocted a contract in 2013 that demanded more than $3 million in fees for five years, prohibited cancellation and had the signature of the union's general counsel, Gary Hall.

An investigation found that the fake contract was drawn up months after Hall's death. Lombardo admitted a "Gary A. Hall" signature stamp was used to falsify the document.

Another Prim Capital executive arrested in the probe, Carolyn Kaufman, was convicted at trial late last year and sentenced to three months of probation for conspiracy to obstruct justice. A recording had captured Lombardo coaching on how to mislead investigators to cover their tracks, prosecutors said.

Lombardo was ordered to begin serving his prison term by July 25.

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