18 Former N.B.A. Players Are Charged in $4 Million Insurance Fraud Scheme

18 Former N.B.A. Players Are Charged in $4 Million Insurance Fraud Scheme

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Greg Smith had been out of the National Basketball Association for about two years in December 2018, when the former power forward for the Houston Rockets and Dallas Mavericks had what appeared to be a long day at a dental office in Beverly Hills. Invoices submitted on his behalf showed that he received IV sedation and root canals, and had crowns placed on eight teeth.

But the invoices, totaling $47,900, were fake, federal prosecutors in Manhattan said on Thursday.

Mr. Smith was actually thousands of miles from California, playing basketball in Taiwan at the time, the prosecutors said, adding that they had evidence to prove it, including box scores showing he had appeared in games there.

Mr. Smith was one of 18 former N.B.A. players who were charged in what federal authorities portrayed as a brazen conspiracy to defraud a health care program extended to current and former N.B.A. players.

The claims submitted by another defendant, Sebastian Telfair — a Brooklyn high school legend who went on to a journeyman’s professional career — suggested truly woeful dental problems. His claims showed he had received root canals on 17 teeth in a year’s time, the indictment said. He pleaded not guilty on Thursday and was released on bond.

“The defendant’s playbook involved fraud and deception,” Audrey Strauss, the U.S. attorney for the Southern District of New York, said at a news conference on Thursday announcing the charges.

“Their alleged scheme has been disrupted and they will have to answer for their flagrant violations of law,” Ms. Strauss said.

She and Michael J. Driscoll, the head of the F.B.I.’s New York office, each added that the investigation was continuing.

The prosecutors said that the former players — and one player’s spouse who was also charged — submitted claims totaling $3.9 million, and they ultimately received about $2.5 million in fraudulent proceeds.

While none of the defendants were superstars, several were well-known players, like the defensive stalwart Tony Allen, and Ronald Glen Davis, who went by his middle name and was nicknamed “Big Baby.” Both played on the Boston Celtics team that won the N.B.A. championship in 2008.

Another defendant, Terrence Williams, who prosecutors said had orchestrated the scheme, found some success during his college years at the University of Louisville but had an unremarkable professional career after being drafted in the first round by the New Jersey Nets in 2009.

Mr. Williams also received kickbacks of at least $230,000 from 10 of the former players accused of participating in the scheme, the indictment said.

The defendants were each charged with one count of conspiracy to commit health care fraud and wire fraud, and Mr. Williams was also charged with aggravated identity theft. The conspiracy count carries a maximum prison sentence of 20 years, the government said.

Lawyers for many of the defendants could not immediately be identified on Thursday for comment. Mr. Telfair’s lawyer, Deborah A. Colson, declined to comment.

In a statement, the N.B.A. called the allegations “particularly disheartening” and said it would cooperate fully with the investigation. The league’s players union said it was aware of the indictment and was monitoring the case.

According to the indictment, Mr. Williams first submitted a fraudulent claim seeking reimbursement of $19,000 for services he purportedly received from a chiropractor in Encino, Calif. After the claim was approved and he received $7,672, he began to recruit others, the indictment said.

Some of the medical claims made by the former players were identical, straining credulity, prosecutors suggested.

Mr. Davis, Mr. Allen and a third defendant, Tony Wroten, for example, all claimed to have had root canals on the same six teeth on the same date in April 2016 — and crowns on those teeth a month later, the indictment said.

Some of the claims filed as part of the scheme resulted in large reimbursements, prosecutors said. Four of the former players were each paid more than $200,000 after claiming to have visited the same chiropractor Mr. Williams had, according to the indictment. One of the four, Shannon Brown, received $320,000.

But the nearly $4 million that prosecutors said the defendants sought in the scheme is still a fraction of the tens of millions of dollars some of those indicted earned in their N.B.A. careers.

Several of the defendants played at least part of their career for New York-area teams, including Mr. Brown with the Knicks, and Mr. Williams, Antoine Wright and Chris Douglas-Roberts with the Nets.

Mr. Telfair, a cousin of the former N.B.A. star Stephon Marbury, graced magazine covers as one of the best high school players in the country when he played at Brooklyn’s Lincoln High School in the early 2000s, even appearing beside a teenage LeBron James on a cover of Slam magazine in 2002. But he was dogged by legal troubles related to weapons during his professional career, which included early stints with the Portland Trail Blazers and the Celtics.

In 2008, Mr. Telfair pleaded guilty to illegal handgun possession and was sentenced to three years’ probation. In 2019, he was sentenced to three and a half years in prison for gun possession, this time stemming from an arrest two years earlier, when he was found with four loaded guns and a bulletproof vest.

The indictment unsealed on Thursday noted that in order to receive benefits from the health care program, players were required to have spent at least three seasons on an N.B.A. team roster.

That may be one reason the names of many of those charged in the scheme prompted recognition, and even nostalgia, from dedicated N.B.A. fans — for whom they were like memorable, if minor, character actors.

Among those indicted was Milton Palacio, a former Boston Celtic, who in 2000 hit a wild buzzer beater against the Nets after stealing a pass. Now an assistant coach for the Portland Trail Blazers, Mr. Palacio was placed on administrative leave after the charges were announced, according to a statement from the team.

The defendants also included promising prospects whose careers did not reach the heights that had been expected, like Darius Miles and Mr. Telfair, who were each drafted out of high school.

And there was Ruben Patterson, who spent his rookie year with the Los Angeles Lakers and was said — perhaps apocryphally — to have called himself the “Kobe Stopper,” for his supposed ability to slow down Kobe Bryant when Mr. Patterson guarded him later in their careers.

Perhaps the most accomplished player to be indicted was Mr. Allen, who made a number of all-defensive teams between 2011 and 2017. Next year, he is scheduled to have his number retired by the Memphis Grizzlies.

Sopan Deb contributed reporting.


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