Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRENCE WILLIAMS pled guilty to conspiracy to commit health care and wire fraud, and aggravated identity theft, in connection with a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”). WILLIAMS pled guilty before U.S. District Judge Valerie E. Caproni. Sentencing is scheduled for January 25, 2023.
U.S. Attorney Damian Williams said: “Williams led a scheme involving more than 18 former NBA players, a dentist, a doctor, and a chiropractor, to defraud the NBA Players’ Health and Welfare Benefit Plan of millions of dollars. Williams also impersonated others to help him take what was not his—money that belonged to the Plan. I thank our law enforcement partners in the FBI for their hard work investigating this pervasive scheme.”
According to the Indictment, public court filings, and statements made in court:
The Plan is a health care plan providing benefits to eligible active and former players of the NBA and their family members. From at least 2017 through at least 2021, WILLIAMS, and more than a dozen others, engaged in a widespread scheme to defraud the Plan by submitting and causing to be submitted fraudulent claims for reimbursement of medical and dental services that were not actually rendered. Over the course of the scheme, the defendants submitted and caused to be submitted to the Plan false claims totaling at least approximately $5 million.
WILLIAMS orchestrated the scheme to defraud the Plan. WILLIAMS recruited other Plan participants to defraud the Plan by offering to provide them with false invoices to support their fraudulent claims. WILLIAMS’s co-defendants, including a dentist in California and a doctor in Washington State, provided WILLIAMS with fraudulent invoices that WILLIAMS sent to other co-conspirators. WILLIAMS also recruited non-medical professionals to copy invoices made by medical offices, which WILLIAMS provided to co-conspirators and were used to defraud the Plan. WILLIAMS conspired with others to submit fraudulent claims to the Plan in exchange for kickback payments to WILLIAMS of at least $300,000.
To verify that certain services were medically necessary, the Plan sometimes requires participants to provide, from a medical provider, a letter of medical necessity establishing that necessity of the provided services. WILLIAMS fraudulently created and transferred letters of medical necessity for three co-conspirators. Those letters were unusual in several respects: they were not on letterhead, contained unusual formatting, had grammatical errors, and one of the letters misspelled a purported patient’s name.
WILLIAMS also impersonated others in furtherance of the scheme. WILLIAMS pretended to be employees of the Plan’s administrative manager. In one instance, WILLIAMS created an email account designed to appear as an email account used by the Plan’s administrative manager. WILLIAMS used that account to attempt to frighten a co-defendant so that the co-defendant would re-engage with WILLIAMS and would pay kickback to WILLIAMS.
On other occasions, WILLIAMS used another email account he created to threaten another co-defendant—a doctor who created fraudulent invoices for WILLIAMS. WILLIAMS used this email account to pretend to be employees of the Plan’s administrative manager and demand that this co-defendant pay WILLIAMS a “fine” or the “employees” would tell the authorities about the submission of fraudulent invoices. Through these threats and deception, WILLIAMS obtained approximately $346,000 from this particular co-defendant.
In or about April 2022, after WILLIAMS was charged and arrested in this case, and while on pretrial release, WILLIAMS texted threats to a witness including that the witness was “talking way to[o] f[—]ing much,” to “shut the f[–]k up,” and “me spitting in your face is exactly what you’ll see.” Following a motion by the Government on May 6, 2022, as a result of this obstructive conduct, Judge Caproni remanded WILLIAMS.
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WILLIAMS, 35, of Seattle, Washington, pled guilty to one count of conspiracy to commit health care and wire fraud, which carries a maximum term of twenty years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. As part of his guilty plea, WILLIAMS agreed to pay restitution of $2,500,000 to the Plan and to forfeit $653,672.55 to the United States.
The sentencing of WILLIAMS is scheduled for January 25, 2023, before Judge Caproni.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Ryan B. Finkel and Daniel G. Nessim are in charge of the prosecution.
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