James Clark, 52, Overland Park, Kan., has pleaded guilty to tax evasion and bank fraud charges, U.S. Attorney Barry Grissom said today.
Clark, a former owner of the Kansas City Knights basketball team, pleaded guilty today in U.S. District Court in Kansas City, Kan., to one count of tax evasion and one count of bank fraud.
In his plea, Clark admitted that he withheld more than $502,000 in payroll taxes from employees of his company, SWISH Holding Corp., but failed to pay the money to the Internal Revenue Service.
He diverted the funds and used them for his own purposes, including the operation of the basketball franchise.
In his plea, Clark also admitted submitting false information to UMB Bank when he applied for a line of credit. He overstated the income, profits and assets of SWISH.
He gave the bank purported copies of federal income tax returns for SWISH for 2002 and 2003. The returns had not actually been filed with the IRS and falsely overstated SWISH’s income.
Additionally, as a personal guarantor of the loan, Clark gave the bank statements that over-stated the value of the Kansas City Knights and misrepresented that he had an ownership interest in the American Basketball Association.
UMB Bank approved the line of credit, and issued draws totaling $1,398,002. He only made one payment on that line of credit, in the amount of $6,368.43.
Sentencing is set for July 16.
He faces a maximum penalty of five years in federal prison and a fine up to $250,000 on the tax evasion count; and a maximum penalty of 30 years and a fine up to $1 million on the bank fraud count.
Grissom commended the Internal Revenue Service, the FBI and Assistant U.S. Attorney Leon Patton for their work on the case.
