WASHINGTON
A federal grand jury sitting in Kansas City, Missouri, returned an indictment Monday, which was unsealed this morning, against a former professional basketball player and representative for the National Basketball Players Association, according to officials.
Jurors charged him with corruptly interfering with the internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft, officials allege.
The indictment alleges that Kermit Alan Washington, 64, used a charity he founded and operated, Project Contact Africa, to defraud donors, eBay and PayPal and the IRS.
In order to induce individuals, including former professional athletes, to make donations to Contact Africa, Washington falsely represented that 100 percent of the donations would go to Africa.
However, Washington diverted charitable donations from Contact Africa to buy gifts and pay personal expenses, including rent, vacations, jewelry and entertainment.
“Individuals who use charitable organizations to defraud donors and evade tax obligations inflict substantial harm on every U.S. taxpayer and cause untold damage to well-intentioned charitable endeavors,” said Acting Assistant Attorney General Caroline Ciraolo. “The Department is committed to identifying those engaged in such criminal conduct and holding them accountable.”
“The federal indictment alleges this former NBA player used his celebrity status to exploit the good intentions of those who donated to a charity he founded, called Project Contact Africa,” said U.S. Attorney Tammy Dickinson. “According to the indictment, Washington profited by diverting hundreds of thousands of dollars in donations that was supposed to benefit a clinic in Africa for needy families and children, but instead bankrolled his own personal spending.”
It is alleged that Washington referred professional athletes to Ron Mix, a former professional football player and an attorney licensed in the state of California, whose practice focused on the filing of workers’ compensation claims on behalf of former professional athletes.
In exchange for the referrals, Mix made payments to Contact Africa and claimed those amounts as charitable deductions on his personal tax returns. Upon receipt of these payments, Washington diverted the funds for his own personal benefit.
Washington filed false individual income tax returns for 2010 through 2013, failing to report the funds he diverted from Contact Africa and false Forms 990-EZ on behalf of Contact Africa.. Washington also falsified Contact Africa’s corporate minutes to obstruct the investigation and used the identity of another individual to perpetrate this scheme.
It is further alleged that Washington conspired with others to defraud eBay and PayPal, customers and donors of Contact Africa by allowing the co-conspirators to use Contact Africa’s name, tax-exempt status and IRS Employee Identification Number with eBay and PayPal so the co-conspirators could avoid substantial listing and registration fees incurred in operating online, for-profit businesses.
Moreover, customers who made purchases falsely believed that 100 percent of the proceeds from the co-conspirators’ online eBay sales benefited Contact Africa. In exchange for allowing the co-conspirators to use Contact Africa’s tax-exempt status, Washington received payments from the co-conspirators.
Washington was arrested yesterday in Los Angeles and had his initial appearance in U.S. District Court in California. Washington was ordered to surrender his passport and released on bond and must wear a location monitoring device.
If convicted, Washington is facing more than 40 years in prison.
Washington is presumed innocent unless proven guilty.
Washington played basketball for several NBA teams including the LA Lakers and the Boston Celtics, according to published reports.
He was drafted by the Lakers in 1973 after graduating from American University. He played from 1973 to 1982 and tried to make a comeback with the Golden State Warriors in 1987, but was only on the roster for eight games, according to sports reports.