The Heat suspended Jeffrey R. David after learning federal prosecutors suspect he ran a money-laundering operation that sent $9 million of money from the Golden 1 Credit Union and another $4.4 million from the Kaiser Permanente Foundation into his account instead of the team's.
The Sacramento Bee reported the investigation on Thursday. Sources told the newspaper David bought beachfront property in Southern California with the money.
David, 44, served as the chief revenue officer for the Kings until June 1, when the team eliminated his job. In July, he joined the Heat in the same capacity.
The Kings reported the alleged theft to federal investigators last week. No charges have been filed.
Federal officials would not answer questions about the subject. The Kings, however, confirmed the investigation on Thursday to The Bee.
"Last week, we alerted federal law enforcement to suspicious financial transactions involving a former Kings employee, Jeff David," the team said. "That investigation is underway and on Monday, U.S. Department of Justice authorities began the formal process of recovering and seizing the properties involved in the investigation."
The team attorney, William Portanova, said the assets are being recovered.
"This was an amazing response by the FBI and the U.S. attorney," Portanova said. "It's rare to be able to identify the culprit and return the diverted assets as quickly as the FBI has."
David, a former NBA executive, negotiated advertising and corporate partnerships for Sacramento. The credit union signed a 20-year, $120 million naming rights contract for Golden 1 Center in 2015.
The Heat issued a statement on Thursday.
"We are aware of the investigation of Jeff David, which focuses on events that took place prior to his joining our team," according to the statement. "We are fully cooperating with the authorities. Jeff David is on leave, pending the outcome of the investigation."
At the time of his hiring on July 9, Eric Woolworth, president of the Heat group's business operations, said in a statement, "Jeff is supremely qualified to help us grow our business. He's a fantastic addition to our executive staff and we welcome him with open arms to our family."
--Field Level Media