Theodore Kritza, the former business manager of Cleveland Cavaliers forward Richard Jefferson, has been indicted on charges of defrauding his client of $7 million. From Curt Prendergast and Bruce Pascoe of the Arizona Daily Star:
Theodore Kritza is charged with 22 counts of bank fraud, wire fraud, and aggravated identity theft, according to a June 14 indictment filed in U.S. District Court in Tucson. He is scheduled to be arraigned Friday morning, June 30.
Kritza forged Jefferson’s signature on bank documents in 2005 to give himself power of attorney over Jefferson’s finances, according to the indictment. Kritza made legitimate payments for Jefferson’s bills, but also used millions of dollars for his own benefit.
Jefferson discovered the alleged fraud in 2012 when he bought a home and learned of an outstanding loan and several other loans initiated without his knowledge, according to the 30-page indictment.
Prosecutors said Kritza used his fraudulent power of attorney to renew lines of credit, open new lines of credit, transfer money from Jefferson’s accounts into his accounts, and take out a business loan in Jefferson’s name.
The indictment said Kritza fraudulently transferred $6.99 million from Jefferson’s accounts to his own accounts from 2004 to 2013, when Jefferson froze the accounts. If convicted of the wire fraud charges, prosecutors asked the court to force Kritza to forfeit those funds. They also ask that Kritza forfeit $3.8 million if convicted of the bank fraud charges.
The indictment said Kritza asked Jefferson in 2004 to allow him to use a line of credit, with Kritza’s house as collateral. Jefferson gave Kritza verbal permission, thinking Kritza, who was a business partner and friend, would make the payments until the scheduled end of the line of credit.
Instead, Kritza renewed the line of credit without Jefferson’s knowledge, and used it for his own personal gain. He did not use his house as collateral, the indictment stated.
As part of the scheme, Kritza deposited millions of dollars obtained from the lines of credit into Jefferson’s bank accounts, but then distributed the money among his own bank accounts, according to the indictment.
Kritza also used $980,000 from Jefferson’s bank accounts to make payments on American Express Platinum cards in the names of Kritza and his wife between 2009 and 2013, according to the indictment.
Jefferson’s business relationship with Kritza began in 2001, after Jefferson had decided to forego his final year at the University of Arizona and declared for the NBA Draft.
