Financial adviser convicted of obstructing NBA union contract probe

NEW YORK (Reuters) - A principal at an investment advisory firm that did business with the National Basketball Association’s players union was found guilty on Wednesday of obstructing a grand jury investigating those dealings.

Carolyn Kaufman of Prim Capital Corp was found guilty by a federal jury in Manhattan of perjury, obstruction and conspiracy to obstruct justice.

Prosecutors accused Kaufman, 72, of lying to a grand jury about a forged $3 million contract between Prim and the union, which at the time was being investigated by the U.S. Department of Labor.

The verdict came a month after Prim founder Joseph Lombardo, also 72, admitted to defrauding the union and pleaded guilty to mail fraud and conspiracy to obstruct justice.

Steven Molo, Kaufman’s lawyer, said he was disappointed with the verdict. “We believe the evidence did not support it and plan to appeal,” he said.

Prim, based in Independence, Ohio, from 2001 to 2013 was the primary outside investment adviser for the National Basketball Players Association, assisting in managing up to $250 million of the union’s assets.

According to prosecutors, the Labor Department in 2011 began probing the union and then-Executive Director Billy Hunter, and subpoenaed Prim.

Upon learning that the union would make public the results of an internal investigation, Prim turned over a purported contract showing annual fees over five years of $602,000 and signed by former NBPA general counsel Gary Hall.

Prosecutors said this contract was forged and had been created after Hall’s death, but that Lombardo and Kaufman testified to the contrary before the grand jury.

Molo had contended during the trial, which began last week, that the fake contract was “cooked up” by Lombardo and another Prim employee, and that Kaufman neither knew the signature was fake nor had any reason to commit a crime and risk her career.

Hunter was fired in February. A lawyer for Hunter and a representative for the union did not immediately respond to requests for comment Wednesday.

The case is U.S. v. Kaufman, U.S. District Court for the Southern District of New York, No. 13-cr-411.

Reporting by Nate Raymond in New York; Editing by Leslie Adler