On Thursday, October 7, NBA fans were shocked to hear about one of the largest scams in the league’s history. The news broke out when 18 former NBA players were charged with fraud, by allegedly scamming the NBA Health Organization for over 2.5 million dollars.
There are a massive amount of questions surrounding this issue. But the main question is; How did 2.5 million dollars go missing from the league’s Health and Welfare division, and how did this go unnoticed for so long? According to Franklin accounting teacher Jose Losoya, “It all depends on how often they used the fraudulent invoices and how many invoices were used to defraud the NBA repayment program. The more often an invoice is used, the more times it’s being inspected and increasing the chances of them being caught. We have to remember that this repayment program is huge.” When an accountant is going through the books, their first goal is to confirm where the money is going and if everything balances out. More often than not, the accountant isn’t the one who is supposed to be making sure the players aren’t defrauding the league for money. Because that is ridiculous. It’s a shocking story that nobody would’ve expected; the fact that 18 former NBA players set up a scheme to steal money from the league that has given them so much opportunity is beyond explanation. Because it’s so wild, fraudulent claims were able to fly under the radar for so long.
The next reason that the NBA wasn’t able to detect the fraudulent claims earlier was because they had too many transactions going through the program. All players file their medical expenses through the Health Organization, so it is really hard to pick the needle of fraudulent claims out of the haystack of real ones. Most players used this program as intended, but these 18 former players were able to submit fraudulent claims about dental and medical procedures that they never got, and then the league would reimburse them for these procedures. And since these were all former players with health insurance through the NBA, the league didn’t think anything of it for more than three years. These claims ranged between $65,000 to $420,000 which raises the question; why would these players risk everything in their life for a paycheck? Why lose everything for a fraction of the money you made while in the league. These are players like Tony Allen and Glen Davis who both have estimated net worths over 10 million dollars. They put their families and reputations on the line because of greed, and it didn’t pay off like they thought it would. The outcome of these charges has not been decided yet, but there will be repercussions from the league and the law. Many of these players will be banned from NBA events and won’t be eligible for awards, or to be team ambassadors. But none of the NBA consequences compare to the legal charges that they are facing. All parties involved were charged with conspiracy to commit health care fraud and wire fraud. These charges hold a maximum sentence of 20 years in prison. While awaiting a trial you can only wonder if it was worth it or not.