Carolyn Kaufman, a former president of a Prim Capital Corp. advisory services unit, was sentenced to 3 years' probation, including 6 months under house arrest, for lying to a grand jury investigating a fraud against the National Basketball Players Association.
Prim founder Joseph Lombardo, which managed as much as $250 million for the NBPA, admitted last year to trying to defraud the union of $3 million by drawing up a bogus contract and coaching witnesses. Ms. Kaufman was convicted last year of obstruction by falsely testifying that the contract was real and claiming she didn't speak to anyone about her testimony.
U.S. District Judge Jesse Furman in Southern District of New York the said he wouldn't send the 73-year-old Ms. Kaufman to prison because of her age, her frail health and because he thought her crimes were “aberrational” in a life marked with good works. He also cited dozens of supporting letters he'd received from friends, family and former clients who have known Ms. Kaufman for 30 years or more.
“This case is a tragedy in light of the record she has made for the rest of her life,” Mr. Furman said. “I do not think that jail time is appropriate.”
Mr. Furman ordered Ms. Kaufman to perform 500 hours of community service and pay a $25,000 fine. The sentence matched the recommendation of U.S. court officials. U.S. sentencing guidelines, which aren't binding, called for a prison term of as long as 30 months. Prosecutors said they didn't oppose a sentence below the guidelines, although they recommended “a meaningful period of incarceration” without specifying the term.
Prim's fake 2011 contract with the NBPA listed a fee of $602,000 a year over a five-year term, according to prosecutors. The contract was signed by Gary Hall, the union's former general counsel. An investigation showed Mr. Hall's signature was created from a stamp at Prim, months after the union lawyer died, prosecutors said.
Mr. Lombardo's April 2013 arrest followed months of turmoil at the union, whose members voted to fire executive director Billy Hunter after an independent investigation found that the former federal prosecutor put his own interests ahead of the union's member players.
Mr. Hunter's son, Todd, was a principal at Prim Capital. Billy Hunter in January 2013 purged family members from union roles after the investigation conducted by the New York law firm Paul Weiss Rifkind Wharton & Garrison was critical of nepotism at the organization. The law firm's probe later concluded that Mr. Hunter didn't do anything illegal.
Before sentence was imposed, Ms. Kaufman tearfully apologized to the court and to her family, saying, “I've never even had a traffic ticket and respect the law.”
“I'm humiliated and embarrassed that I'm now here before you,” she said.
Her lawyer, Steven Molo, said his client was grateful that the judge didn't agree with the prosecutor's request for prison term.
“Ms. Kaufman's extraordinary background and broad support certainly justified the judge's decision,” Mr. Molo said, adding that the defense is evaluating options for an appeal of her conviction.
Mr. Lombardo is scheduled to be sentenced by Mr. Furman on June 10.