Former UK basketball staffer gets prison sentence for million-dollar athlete fraud

Leon A. Smith, a former University of Kentucky basketball administrator, was sentenced Monday to about four years in prison for a scheme to defraud $1.3 million from professional athletes.

“I take full responsibility for my actions,” Smith, 45, told U.S. District Judge Joseph M. Hood before sentencing. “...From the bottom of my heart, I’m truly sorry for what I’ve done.”

To each of those whom he defrauded, Smith said, “As your friend, I violated the trust you afforded me. My hope is that some day you will be able to forgive me.”

Smith reports to the Federal Bureau of Prisons on June 1. Hood sentenced Smith to a total of 51 months, or a little more than four years.

Smith pleaded guilty last year to all 14 counts of a federal indictment that charged him with wire fraud, money laundering and aggravated identity theft.

Smith was director of UK men’s basketball operations from 2002 to 2006 under Coach Tubby Smith and was an assistant athletic director from 2006 to 2009. The Louisville native lettered three seasons as a wide receiver for the UK football team from 1993 to 1995.

Leon Smith parlayed his connections to athletes to become a financial adviser with access to personal information that allowed him to conduct transactions on their behalf.

He pleaded guilty to opening unauthorized financial accounts in clients’ names, concealing the unauthorized transactions by changing passwords, restricting access to new passwords and fabricating expense reports that used fictitious expenses to explain low balances in the accounts.

He pleaded guilty to misappropriating $1,298,506 belonging to clients from September 2011 to January 2015. A forfeiture allegation in the indictment seeks repayment of the money but it’s unclear whether Smith will be able to make full restitution.

Among the athletes defrauded by Smith was former UK basketball player Josh Harrellson. Last year, a Fayette Circuit Court judge awarded Harrellson $1,025,308 in punitive damages, or six times the amount of compensatory damages ($170,884) that Smith must also pay.

Smith has repaid more than $500,000 to former clients and has repaid one client $71,000, said his attorney, Elizabeth Snow Hughes.

Smith, his wife, Meg, and two daughters now live in Batesville, Ind. There he helped coach a youth basketball team and organized and ran a basketball camp for girls.

Last week, the judge had 56 letters and emails supporting Smith put into the public court record. Most were from Batesville and most were written in May 2017, shortly after Smith was indicted by a federal grand jury.

“I think we made money for the Postal Service for all the letters I received from Batesville,” Hood told Smith in court.

Many were written by co-workers, church friends and even children Smith came to know in Batesville. One writer was a 6-year-old girl who participated in a “fastest kid in town” contest — apparently inspired by a similar summer event in Lexington — that Smith organized.

The writers noted that Smith had been open about suffering from bipolar disorder.

“I know he is remorseful for what he did and is in the process of making amends and paying back the money owed,” wrote Mark Giesting.

“He may not be able to change what he had done in the past, but it seems as though he has learned from those past indiscretions that have been made,” wrote David M. Meyers.

Meg Smith also read a written statement in court. She said her husband “struggles immensely” each day because of what he has done.

“What Leon did is not who he is,” she said.

Judge Hood said he personally knows someone who has suffered from bipolar disorder, a brain disorder characterized by swings in mood, energy and activity levels. The moods range from extreme elation to sad, depressed periods.

Smith also noted in court that he received seven to nine concussions during football. Judge Hood questioned in court whether that head trauma might have contributed to Smith’s mental illness.

“I wonder what impact that had on this,” Hood said.

This story was originally published April 9, 2018 at 12:04 PM with the headline "Former UK basketball staffer gets prison sentence for million-dollar athlete fraud."