Former NBA Players Charged in Fraud Scheme

Eighteen former NBA players were indicted for defrauding the NBA’s Health and Welfare Benefit Plan for approximately $4m, according to law enforcement officials. Sixteen of the 18 are currently in federal custody.

Former player Terrence Williams “orchestrated” a plan to submit false claims to the league’s health care plan and involved other former players by offering false invoices in exchange for payment. Law enforcement accuses Williams of receiving at least $230,000 in kickback money from 10 other players.

The Charges

Former players who have been charged include Alan Anderson, Anthony Allen, Shannon Brown, William Bynum, Ronald Glen “Big Baby” Davis, Christopher Douglas-Roberts, Melvin Ely, Jamario Moon, Darius Miles, Milton Palacio, Ruben Patterson, Eddie Robinson, Gregory Smith, Sebastian Telfair, Charles Watson Jr., Antoine Wright, and Anthony Wroten. Desiree Allen, the wife of Tony Allen, was also charged.

The group has been charged with conspiracy to commit health care and wire fraud. U.S. Attorney Audrey Strauss told reporters that the group relied on “fraud and deception,” and labeled Williams the “linchpin” of the scheme.

Unforced Errors

Officials say the former players submitted $3.9m in false claims, receiving $2.5m in payouts. Authorities say the group was caught due to their own errors.

Smith, a Former Houston Rockets player, is specifically cited in this capacity. Smith submitted claims for IV sedation, a root canal and crowns that he allegedly received in late December 2018 in Beverly Hills, according to prosecutors. The operation never occurred on the day Smith claimed to be having the procedure because he had a game that day for his team at the time, a professional team in Taiwan’s Super Basketball League.

Smith played that day for the Bank of Taiwan, scoring 11 points in an 84-76 loss.

New Jersey Nets guard Terrence Williams moves past Orlando Magic guard Vince Carter during an NBA basketball game in Orlando, Fla., Friday, Nov. 5, 2010. Williams was called the “linchpin” of the fraud scheme against the NBA health care plan by prosecutors. It is alleged the scheme involves 18 former players total, according to an indictment on Thursday, Oct. 7, 2021. (AP Photo/Phelan M. Ebenhack)

The group also submitted fake invoices and medical forms that had obvious blemishes. The indictment says the documents stood out because “they are not on letterhead, they contain unusual formatting, they have grammatical errors.”

The Impact

Michael Driscoll, assistant director for the FBI’s New York Field Office, said cases such as the currently alleged one have an impact on consumers.

“This (health care) industry loses tens of millions of dollars a year to fraud,” he said. “These costs are then passed down to business and customers. That’s a fraud we take very seriously.”

It is unclear whether any of the defendants have hired attorneys. Former NFL players were charged last month with a similar crime after admitting to defrauding the NFL’s plan. Those former players face years in prison for their role in that scheme, according to the U.S. Department of Justice.