Last month the web was inundated with news of allegations made against Kareem Abdul-Jabbar’s charity, the Skyhook Foundation based out of Long Beach, CA. 

In 2009 when the foundation opened, Mr. Abdul-Jabbar said “I have decided to open up the Skyhook Foundation to improve people’s lives through sports and education because my life could not have been what it is without sports and education”. Now, while Mr. Abdul-Jabbar is not listed as a defendant, his charity is said to be a front to scam people, and only benefits the members of the board. 
The Urban Daily reported that Mr. Abdul-Jabbar’s manager and long-time friend Deborah Morales collaborated with Julien’s Auctions of Beverly Hills to sell the star’s sports memorabilia. As part of the arrangement made, Julien’s Auctions was to donate $300,000 to the foundation. The auction house alleges that after their donation of the agreed-upon funds, the foundation had no intention of using the funds for anything other than fraud- lining the pockets of the board of directors. They have asked for Deborah Morales to return their donation and are also requesting punitive damages.
If you look at page 18 of Skyhook Foundation’s 2010 tax Form 990, it is disclosed that $200,000 went to Iconomy LLC (owned by Deborah Morales) for the purpose of purchasing the right to show a film produced and owned by Iconomy, LLC, the cost to the foundation was below fair market value and was approved by the board of directors.  
So far, there has been a lack of provided proof surrounding the auction house’s allegations, and no public statement from Mr. Abdul-Jabbar’s side.
To be continued…

By Kim Onisko, CPA

Kim Onisko is a Partner with Onisko & Scholz, Certified Public Accountants, LLP. You can find him on Google+. He has been in public accounting for over 20 years and has a specialty in forensic accounting.