Former NBA Player Charged In Far-Reaching Software Piracy Scheme

May 25, 2016

An investigation that originated with a Kansas City company in 2013 has led to the indictment on fraud charges of former NBA player Kermit Washington.
Credit Chilli Head / Flickr--CC

A far-reaching software piracy scheme has led to the indictment in Kansas City of former NBA player Kermit Washington, who is accused of using a charity he founded to defraud donors, eBay, PayPal and the IRS.

The indictment was unsealed this morning. Washington was arrested Tuesday in Los Angeles and is set to make a court appearance before U.S. Magistrate Judge John T. Maughmer on June 16.

The 15-page indictment says Washington, 64, used almost all the money donated to his charity, Project Contact Africa, to buy gifts, vacations, jewelry, entertainment and other perks for himself.

At a news conference announcing the indictment, Tammy Dickinson, the U.S. Attorney for the Western District of Missouri, said Washington had “used his celebrity status to exploit the good intentions of those who donated” to the charity, which was ostensibly set up to help African children infected with the HIV virus.

The indictment charges that Washington, who until recently was a regional representative for the National Basketball Players Association, referred athletes to Ron Mix, a former professional football player and San Diego attorney who specialized in workers’ compensation on behalf of athletes.

Mix, in turn, made payments to Project Contact Africa and claimed them as charitable deductions on his tax return.

Mix pleaded guilty on Monday to tax fraud and faces up to three years in prison.

Mix was an offensive lineman with three NFL teams during his playing career and was inducted into the Pro Football Hall of Fame in 1979.

Six other defendants pleaded guilty in December to participating in what prosecutors described as one of the biggest software piracy schemes ever uncovered and prosecuted by the Justice Department.

The cases were brought in Kansas City because the criminal investigation originated with a Kansas City company, Software Slashers.

In 2013, investigators learned that Casey Lee Ross, the owner of Software Slashers, had bought and redistributed thousands of illegitimate Microsoft key codes and counterfeit product key cards from sources in China, according to a December release from the Justice Department. Ross pleaded guilty nearly a year ago to participating in the conspiracy.

All told, prosecutors say, some $100 million worth of illicit and counterfeit software was sold as part of the scheme. Washington allegedly participated in the scheme by auctioning off illegally acquired Microsoft and Adobe software through his charity.

He’s charged with defrauding eBay and PayPal because he allegedly allowed co-conspirators to use his charity’s tax-exempt status to avoid paying fees that for-profit companies must pay. The indictment also charges that he received payments from his co-conspirators in exchange for allowing them to use the charity’s tax-exempt status.

Washington began his playing career with the Los Angeles Lakers and retired in January 1982 after three seasons with the Portland Trail Blazers. His Wikipedia entry says he is best remembered for punching and nearly killing opposing player Rudy Tomjanovich during an on-court fight in 1977.

Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR. You can reach him on Twitter @DanMargolies.