Yesterday I wrote about the guilty plea of former San Diego Charger Ron Mix; today, the other shoe dropped. “Individual F,” as former NBA basketball player Kermit Washington was called in the Mix indictment, was arrested on charges of corrupt interference with the internal revenue laws, wire fraud, obstruction of justice, and aggravated identity theft.
It is alleged that Washington referred professional athletes to Ron Mix, a former professional football player and an attorney licensed in the state of California, whose practice focused on the filing of workers’ compensation claims on behalf of former professional athletes. In exchange for the referrals, Mix made payments to PCA and claimed those amounts as charitable deductions on his personal tax returns. Upon receipt of these payments, Washington diverted the funds for his own personal benefit. Washington filed false individual income tax returns for 2010 through 2013, failing to report the funds he diverted from PCA and false Forms 990-EZ on behalf of PCA. Washington also falsified PCA’s corporate minutes to obstruct the investigation and used the identity of another individual to perpetrate this scheme.
It is further alleged that Washington conspired with others to defraud eBay and PayPal, customers and donors of PCA by allowing the co-conspirators to use PCA’s name, tax-exempt status and IRS Employee Identification Number (EIN) with eBay and PayPal so the co-conspirators could avoid substantial listing and registration fees incurred in operating online, for-profit businesses. Moreover, customers who made purchases falsely believed that 100 percent of the proceeds from the co-conspirators’ online eBay sales benefited PCA. In exchange for allowing the co-conspirators to use PCA’s tax-exempt status, Washington received payments from the co-conspirators.
According to the indictment, Mr. Washington diverted about $500,000 of donations to a charity he founded and used them for his personal benefit. That money also allegedly didn’t make it onto his personal tax return. There are also allegations of fraud against eBay and PayPal, and identity theft. This alleged identity theft was not for purposes of obtaining a tax refund; rather, he used the name of someone without their knowledge as the “Secretary” of his charity on the Form 990-EZ filed for his charity.
Of course, these are just allegations but one thing is certain: Mr. Washington is looking at a lengthy term at ClubFed if he’s found guilty of the charges.