Officers of Cleveland-Area Firm Sentenced for NBA Players Union Fraud, Cover-Up

NBA players
(USA Today)

Joseph Lombardo may not have stolen funds, but it was the attempt that counted. Last Tuesday, June 10, Lombardo, founder and managing director of the Independence, Ohio-based Prim Capital Corp., was sentenced in Manhattan federal court to 18 months in prison for forging signatures in an attempt to renew a multi-year benefits management contract with the National Basketball Players Association (NBPA) worth more than $3 million. Almost three weeks earlier, on May 21, chief compliance officer for theĀ firm, Carolyn Kaufman, was sentenced to six months of home confinement, three years of probation, and 500 hours of community service, andĀ fined $25,000, for helping to conceal the fraud. Lombardo pled guilty in November; Kaufman had been found guilty last December following a trial. The actions follow probes by the Labor Department and the Justice Department.

Union Corruption Update has reported on this case a number of times. About three years ago, Lombardo, founder and managing director of Prim Capital, found himself drawn into a bitter rift between his friend, NBPA Executive Director Billy Hunter, and then-association president and star point guard Derek Fisher. Fearful the players union would not renew its servicing contract with Prim, Lombardo rubber-stamped the signatures of deceased NBPA General Counsel Gary Hall and another union employee to create the appearance of a renewal. The contract would have been good for five years at $602,000 a year.

Fisher and his allies, meanwhile, had hired a New York law firm to conduct a full audit on mismanagement under Hunter. That triggered an investigation by the Labor Department and eventually the Justice Department. Though Kaufman testified before a grand jury that neither she nor Lombardo had forged any signatures, Lombardo, unaware he was being secretly taped, could be heard coaching Kaufman how to avoid questions on the subject. Each eventually was arrested and indicted in the spring of 2013.

Former LIUNA Local Employee in Nevada Sentenced for Embezzlement

LIUNA
(nlpc.org)

If Las Vegas is the place to get lucky, then Aurora Rios hit the jackpot – sort of. On June 9, Rios, ex-office cashier for Laborers International Union of North America Local 872, was sentenced in U.S. District Court for the District of Nevada to 18 months in prison, six months of home confinement, and three years of supervised release for embezzling funds from the Las Vegas union. Though ordered to pay $11,500 in restitution and $2,175 in fines, she could have owed a lot more. Rios had been charged in April 2010 with 21 counts of embezzling $167,500 and three counts of falsifying union records.

She pleaded guilty in April 2012. Rios was one of three persons charged in the case; the two others, Stacy Johnson and Aundrea Valerio, also pleaded guilty. The total theft, originally reported at $225,000, later was estimated at $320,000. The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.