Former NBA player Kermit Washington is charged in KC with fraud, identity theft, obstructing justice

Federal prosecutors in Kansas City announced charges Wednesday against former NBA player Kermit Washington related to the African charity he founded.

Washington, 64, whose career was marred by a 1977 incident in which he almost killed another player, was arrested Tuesday in Los Angeles.

A federal grand jury in Kansas City indicted him on charges of interfering with internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft, prosecutors said.

Washington allegedly diverted more than $480,000 from the Project Contact Africa charity he founded and “bankrolled that money for his own profit,” said Tammy Dickinson, U.S. attorney for the Western District of Missouri.

“Washington used his celebrity status to exploit the good intentions” of those who donated to the charity, she said.

An attorney representing Washington called the indictment a “travesty” and said Washington is innocent of any “fraud-related activity.”

“Given the secretive, biased and unfair nature of the federal grand jury process, with no right to have a defense attorney involved in the proceedings, the indictment is suspect,” attorney Karren Kenney said in a written statement.

Washington appeared Tuesday in federal court in Los Angeles and was released on bond pending a first appearance next month in U.S. District Court in Kansas City. He was required to surrender his passport and is subject to electronic monitoring while on bond.

Some of the charges against Washington are linked to the federal criminal case against lawyer and Pro Football Hall of Fame member Ron Mix.

Mix pleaded guilty Monday in Kansas City to filing a false tax return.

Mix donated money to Project Contact Africa, or PCA, in exchange for Washington referring former professional athletes to him to represent in workers’ compensation cases in California, according to terms of his plea agreement.

Officials said Tuesday that Washington used his “unique position” as a regional representative for the National Basketball Players Association to refer clients to Mix.

A spokesman said Wednesday that the association would have no comment on the case.

Kenney, Washington’s attorney, said in her statement that soliciting donations for the charity from Mix and others was not illegal.

Washington and his charity also were involved in another federal criminal case based in Kansas City involving the sale of counterfeit computer software and related products.

Defendants in the software case allegedly paid him for allowing them to sell items on the charity’s website, which saved them hundreds of thousands of dollars in fees that would have been owed to PayPal and eBay.

Dickinson said the charges against Washington stemmed from the investigation into that computer software case involving a Kansas City area man.

“We do what we do best and we followed the money,” Dickinson said. “We followed the money trail that led to Project Contact Africa and then that trail led to Kermit Washington.”

The Kansas City man and five others who live across the United States have pleaded guilty to the large-scale conspiracy to sell pirated and counterfeit Microsoft and Adobe products they obtained in China and other foreign countries.

Federal authorities said previously that it was one of the largest software piracy cases ever prosecuted in the United States.

Since 2004, Washington conspired with those involved in the software case to “unjustly and fraudulently enrich themselves” by defrauding eBay and PayPal, according to the indictment announced Wednesday.

By using the charity’s website to sell items, the conspirators avoided the listing and registration fees they would have paid if operating as a for-profit business.

Washington also provided memorabilia autographed by current and former NBA players to be sold through the site.

From May 2012 through December 2014, one of the software counterfeiters made monthly payments of about $2,000 to the charity in exchange for use of its website, according to the indictment.

According to Kenney’s statement, that man victimized and used Washington, who was unaware that the site was being used to sell pirated software.

The indictment also alleges that beginning in 2010, Washington “corruptly” interfered with internal revenue laws in multiple ways, including failing to report income diverted from the charity on tax returns, soliciting former professional athletes to donate money to the charity but using the money for his own personal benefit, and falsifying the charity’s internal documents in an attempt to impede the federal investigation.

The indictment lays out numerous payments Mix sent to the charity in exchange for the client referrals from Washington.

All told, Mix paid about $155,000 for the client referrals, according to his plea agreement.

Washington allegedly used much of that money to pay for things like airline flights, restaurant meals, hotel stays, jewelry, clothes, groceries, home furnishings and credit card bills.

Ultimately, very little of the money donated to the charity went for its stated purpose of helping needy families and children in Africa, Dickinson said Wednesday.

“People thought 100 percent of the donations were going to PCA,” she said. “But very quickly it was going out of PCA and into Kermit Washington’s pocket.”

Kenney, however, said that since Washington founded the charity in 1994, he has dedicated his time and money to helping people in need in Africa. The charity closed earlier this year.

“In the 20 years Mr. Washington led Project Contact Africa, it has helped numerous children and families not only survive, but also educate themselves and open the way for a brighter future,” her statement said.

This story was originally published May 25, 2016 at 9:15 AM with the headline "Former NBA player Kermit Washington is charged in KC with fraud, identity theft, obstructing justice."