Knox Basketball club fighting for survival after falling prey to global fraud

UPDATE: A “DISASTROUS” global scam has left Victoria’s biggest local basketball association on the brink of collapse and placed more than 5500 children in limbo.

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A GLOBAL scam has left Victoria’s biggest local basketball association on the brink of collapse and placed more than 5500 children in limbo.

Knox Basketball Incorporated — which boasts more than 1000 teams and operates the State Basketball Centre — is fighting for survival after a fraud involving one of the world’s richest men, a former Australian Olympian and tech giant Microsoft.

The Melbourne club has been hit with massive debt and legal bills after being caught in the fraud, which saw at least 30 victims fleeced of $5.18 million.

Knox chief Stephen Walter said its position was “disastrous’’ after being led to believe former Microsoft chief Steve Ballmer wanted to heavily invest in the club.

There had been a suggestion that each member chip in $50 to help the club out, but Mr Walter said this would not necessary.

He was confident they could get through the situation without hitting members for money.

“They put their hands in their pockets when we first uncovered a number of financial problems a couple of years ago,” Mr Walter said.

Stephen Bruce Gordon, who had been an assistant coach at the NBA’s Seattle Supersonics, was this week charged in the US with fraud following a 10-month investigation by the FBI.

It is alleged Mr Gordon contacted former Knox boss and Australian basketball hall-of-famer Wayne Carroll claiming Microsoft wanted to provide funding for the “international promotion of basketball”.

It is believed Knox paid Mr Gordon up to $5100 a month for almost two years, believing the deal could land it a licence to become Melbourne’s second NBL franchise.

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Mr Walter said the club was exploring legal and insurance options and would tonight lobby Basketball Victoria for assistance.

“There is a lot at stake because we have 9000 members and at the end of the day we still want kids playing basketball,’’ he said.

“I’m hoping there will be some insurance because there has been fraud committed against us from the US and he has basically taken everyone for a ride. The whole thing is bizarre,’’ he said.

Mr Carroll, who represented Australia at the Los Angeles and Seoul Olympics, lost his job at Knox over the disaster dubbed “The Seattle project’’ but won an unfair dismissal claim against the club last year.

He won $200,000 in a financial hit to Knox, on top of about $153,000 it was allegedly defrauded of by Mr Gordon.

Mr Walter said it was now about $400,000 in debt, with little prospect of paying.

“This whole thing has been a catalyst for major financial problems for our organisation,’’ he said.

Basketball Victoria chief Nick Honey said it was “unfortunate’’ that an association which for decades had been one of the state’s biggest was now in hot water.

“They have been the object of some cruel intentions. The board will consider the case and do everything we can,’’ Mr Honey said.

Australian basketball legend Andrew Gaze said Knox had a “very loyal basketball community’’ and “if they can just get their way through this tough period the business is very strong.’’

Knox has had to dump men’s and women’s teams in the second-tier SEABL because it could not afford them.

Mr Carroll could not be reached for comment.

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