Talk about a flagrant foul: The former chief revenue officer for the Sacramento Kings was sentenced Monday to seven years in federal prison, for duping some of California’s largest businesses into wiring $13.4 million to bank accounts he secretly controlled so he could buy beachfront homes on the California coast.
Jeffrey David worked as the Kings’ top sales executive from 2011 until 2018, and before that had been vice president of corporate partnerships with the team since 2006. According to court filings, David established a shell company in 2009 called Sacramento Sports Partners, and created corporate bank accounts for it.
In 2012, David field-tested an invoice-fraud scam using the shell company. He sent bogus Sacramento Kings invoices (on company letterhead) to three sports advertising companies in New York City, billing them a collective $29,000 for services the Kings never actually rendered and asking for the money to go to Sacramento Sports Partners — where David, of course, was the sole controller and signatory on the accounts.
By 2016, David set his fraud sights higher. That year the Kings opened a new arena and a new practice facility in downtown Sacramento, started shopping around naming rights for both. Golden 1 Credit Union, with $12 billion in assets and one of the largest credit unions in the country, agreed to pay $110 million for naming rights to the arena. Kaiser Permanente agreed to pay $28 million for naming rights to the practice facility.
Since David was chief revenue officer and previously had been head of corporate sponsorships, he was privy to the negotiations for both deals and knew the terms for both contracts. So once the original deals were signed, David sent follow-up correspondence “amending” the original agreements and — wait for it — directing the new payments back to the shell company he controlled.
Invoice Fraud and More
First David approached Golden 1 Credit, offering lower payments in the future if the credit union made a larger payment of $9 million first. The CEO of the credit union signed the bogus amendment, and David then forged the signature of the Kings’ president to execute the agreement. On July 5, 2016, Golden 1 then wired the $9 million to David’s shell company, Sacramento Sports Partners.
David went to Kaiser Permanente with another sham proposal, offering to cancel any inflation adjustments in the original contract (a 10-year deal) if Kaiser made a $4.4 million payment within 30 days. Which Kaiser did, and again the money was wired to Sacramento Sports Partners.
All of this was bogus. David used Kings letterhead without permission, acted without permission, and forged other Kings executives’ signatures. He even forged the signatures of Golden 1 and Kaiser executives to get their wire payments processed into his accounts.
Once David had control of the $13.4 million, he used those funds to buy two beachfront homes in Southern California. As part of those transactions, he fabricated letters on Kaiser and Golden 1 letterhead purporting to authorize the purchases on the companies’ behalf. David also used some of the money to pay $170,000 American Express charges and to lease a private jet.
Everything unraveled last summer when the Kings eliminated Davids’ job. He took a similar role at the Miami Heat, and his successor at the Kings discovered a mysterious file named “TurboTax” — which contained all the lurid details of David’s fraud. The Kings called the FBI, and eventually David’s successor at the team got David to implicate himself in his crimes during a recorded phone call.
David gets arrested. David cooperates. The feds seize the homes and sell them, so ultimately Golden 1 and Kaiser did get their $13.4 million back. Then came Monday’s sentencing hearing, where a teary-eyed David claimed that a high-pressure, alcohol-fueled culture at the Kings for driving him to make poor decisions. The Kings denied that, the judge didn’t buy it, and now David will report to prison in August. We’ll see him again in 2026.
Internal Control Lessons
We have a few weaknesses to consider here. First, the transaction process between the Kings and its advertisers allowed David to play too large of a role. Sure, fabricating invoices and forging signatures was an abuse of that role, but remember — David never should have had that much authority in the first place, even if his “amended” agreements were entirely legitimate.
For example, the original contract with Golden 1 called for an initial payment of $6 million, and the original with Kaiser called for $2.8 million. Then David comes back asking for adjusted payments of $9 million and $4.4 million, respectively.
Those were material changes to the payment terms. Any time Party A wants to make a material change to payment, the Party B should get independent, secondary authorization from another executive at the first party — ideally in person, perhaps over the phone or something. Otherwise you run the risk of fabricated documents, which is what happened here.
Second, we had a failure of due diligence about the true beneficial owner of the bank account for the amended payments. Yes, “Sacramento Sports Partners” sounds like it could be related to the Sacramento Kings, but that’s Fraud 101: create a bogus account that sounds quite similar to a real account, and hope that nobody notices. That’s precisely what Jho Low did for years with his 1MDB fraud, as richly recounted in Billion-Dollar Whale. Same here.
Third and most fundamental, however: hire senior executives wisely. Monitor their work performance. Occasionally audit the files and work product they create on company equipment. The Kings discovered the fraud when they discovered a file David left behind after getting laid off, after all.
The Kings should have been able to find such evidence earlier — except, that would require a certain permanent skepticism on the team’s part. Which people often don’t want to impose upon senior executives, you’d typically want to trust.
Ain’t it sad how that trust can go awry.