Written on behalf of Feigenbaum Consulting
One of the most challenging aspects of being a professional athlete is managing money. At Feigenbaum Law, we offer a wide range of services to clients in sports and entertainment, including those related to contract reviews, tax planning, and more. Many athletes only have a short window of time to compete in the major sporting leagues. However, those lucky enough to make it that far may be able to benefit from their league’s health insurance plans even after they no longer play. Just this week, ESPN reported that 18 former NBA players had been arrested in what was reported to be a $4 million fraud scheme.
Players alleged to have defrauded health insurance plan
The news broke on ESPN early Friday morning after it was reported that they had taken part in a scam that involved making false claims against their medical plans.
US Attorney Audrey Strauss told reporters gathered at a news conference that the fraud involved former players as well as some of their wives and took place over three years, starting in 2017.
The scheme does not appear to be a complicated one. The indictment stats that the former players would submit fraudulent claims seeking to be reimbursed for medical expenses they had not actually incurred. One example included a player who had made a submission for $48,000 which was supposed to have covered expenses related to root canals on eight of his teeth at a dentist’s office in Beverly Hills. However, it turns out the former player was actually playing basketball in Taiwan at that time and could not have possible been receiving dental care in the United States.
Total amounts claimed were close to $4 million
ESPN reported that the indictment said claims totaling $3.9 million were made, with $2.5 million being sent back to the players. Strauss told reporters that each of the athletes charged had made claims ranging from $65,000 to $420,000.
The leader of the scheme was reported to be Terrence Williams who was a first-round draft pick in the NBA in 2009. The indictment said he submitted $19,000 in fraudulent claims in November 2017. Following this he is said to have recruited other former NBA players to join him in defrauding the plan, offering to provide fake invoices from a chiropractor and dentist in Southern California as well as a wellness office in Washington State. In exchange or his help, Williams is said to have received kickbacks from the other players totaling $230,000. He was also alleged to have intimidated a former player who participated in the scheme by calling him and pretending to be a representative from the health plan’s administrative office, and that the player may have been required to have paid the money back.
ESPN reported that most of the players who took part in the scam had journeyman careers, playing for several teams while in the league, though never making enormous salaries.
The NBA told ESPN the allegations were disheartened by the news because of the costs that come from such fraud schemes. They promised to cooperate fully with the FBI as it continues its investigation.
While the news story had quotes from investigators and the US attorney, lawyers of athletes arrested and the athletes themselves were silent on the matter. We will make sure to follow up on this story as it continues to make its way through the courts.
Feigenbaum Law Helps Athletes Manage Their Careers
At Feigenbaum Law, we understand the financial stress that many professional athletes might feel to maintain their standard of living and provide for their loved ones after their careers have concluded. That’s why it is so important to plan now. Refer your clients and players to us with confidence, knowing that their experience will be pleasant and their tax and legal issues will be handled with care and discretion. Contact us for more information about the services routinely provided to those in the sports and entertainment industry. We offer services to clients in the US, Canada and around the world. Contact us at firstname.lastname@example.org, or call us at (905) 695-1269 or toll free at (877) 275-4792 to learn more about how we can help.