NBA Hall of Fame forward and TV personality Charles Barkley sat in an Alabama court room to tell how he invested money with a man named Donald Watkins, Sr. and his son Donald Jr. –and how it ended up costing Barkley $6.15 million. Barkley wasn’t the only high profile name on the list of people involved with Watkins. Former US Secretary of State Condoleeza Rice is also among those testifying in the Watkins trial.
[Background: Watkins is alleged to have run a pyramid scheme like that of Bernie Madoff, but on a smaller scale. It’s alleged that funds coming into Watkins’ business weren’t invested as advertised in oil production in Namibia for instance (see below) or other investment vehicles, but were often instead used instead for personal expenses like “alimony, car repairs, repaying loans to Watkins Sr’s girlfriend” according to court testimony. Watkins faces “seven counts of wire fraud, two counts of bank fraud and one count of conspiracy to commit wire fraud and bank fraud” according to Al.com.]
In the email, Donald Jr suggests pitching Barkley on Nabirm, a company set up to hold and develop oil and mineral rights in Namibia. Two days later, Watkins Sr does just that, with no mention of their true intent for his money — paying personal expenses.
— Kyle Whitmire (@WarOnDumb) February 28, 2019
As usual, Barkley is one to watch when it comes to telling a story, saying bluntly what happened and what he knew just as he does in his commentator role on TNT. The excellent journalist Kyle Whitmore, who tweets at the clever handle @warondumb, was in the court sharing some of Barkley’s revelations. Barkley appears to have gone on blind trust in investing with Watkins — on almost every occasion.
Here are various hallmarks of a pyramid scheme in action, as recorded by Whitmore at court:
In May 2010 email to Barkley, Watkins solicits $1 m investment for ongoing projects in Morocco, Mexico, Senegal, South Africa and South Korea.
AUSA Peeples asks Barkley if he knew Watkins was going to use his money to refund another investor’s money.
A: “No.”
— Kyle Whitmire (@WarOnDumb) February 28, 2019
An internal document prepared by Watkins Sr shows Barkley’s money would be used for alimony, car repairs, repaying loans to Watkins Sr’s girlfriend, among other personal expenses.
Barkley says he had no idea this money was being used for this stuff.
— Kyle Whitmire (@WarOnDumb) February 28, 2019
In an email to Barkley’s financial advisor, Watkins Sr promises a return on Barkley’s investment by Dec. 2012. Barkley says he never got it.
— Kyle Whitmire (@WarOnDumb) February 28, 2019
A schedule of investments prepared by Watkins, now in evidence and on the screen, shows Barkley put $6.15 million into Watkins businesses.
Barkley says he invested in Watkins’ businesses because he trusted Watkins, didn’t ask his financial advisor to do due diligence.
— Kyle Whitmire (@WarOnDumb) February 28, 2019
