Another earthquake has hit the sports world after reports emerged that the FBI has arrested 10 NCAA basketball officials, including four assistant coaches, along with executives at Adidas on charges of fraud and corruption. From ESPN:

“The picture painted by the charges brought today is not a pretty one,” Joon H. Kim, the acting United States Attorney for the Southern District of New York, said at a Tuesday news conference. “Coaches at some of the nation’s top programs soliciting and accepting cash bribes. Managers and financial advisers circling blue-chip prospects like coyotes. And employees of one of the world’s largest sportswear companies secretly funneling cash to the families of high school recruits.”

“For the 10 charged men, the madness of college basketball went well beyond the Big Dance in March,” Kim said. “Month after month, the defendants exploited the hoop dreams of student-athletes around the country, allegedly treating them as little more than opportunities to enrich themselves through bribery and fraud schemes.”

The FBI began its investigation in 2015. TheThe process revealed to agents a scheme that athlete advisors, which include financial advisers and assistant coaches, paid bribes “to other coaches to exert influence over student-athletes so the athletes would use the services of those paying the bribes.” These coaches can provide the student athletes access “to sports agents, financial advisers, business managers and others.” ESPN continued:

“Moreover, many such coaches have enormous influence over the student-athletes who play for them, in particular with respect to guiding those student-athletes through the process of selecting agents and other advisers when they prepare to leave college and enter the NBA,” the complaints said.

“The investigation has revealed several instances in which coaches have exercised that influence by steering players and their families to retain particular advisers, not because of the merits of those advisers, but because the coaches were being bribed by the advisers to do so,” the papers said.

The documents named former Pittsburgh financial adviser Louis Martin “Marty” Blazer III as the cooperating witness:

Blazer, who founded Blazer Capital Management, was accused of investing money into movies and entertainment ventures without his clients’ knowledge between 2010 and 2012. As part of his plea agreement with the U.S. Attorney’s office, Blazer agreed to plead guilty to securities fraud, aggravated identity theft, false statements and documents, and two counts of wire fraud, according to the Sept. 19 cooperation agreement.

Among other charges, Blazer was accused of “a scheme to commit wire fraud in or about 2000 through in or about 2013 by making payments and loans to NCAA athletes in order to induce the student-athletes to retain the defendant as a financial advisor and/or business manager.”

The four basketball coaches:

  • Lamont Evans of Oklahoma State University
  • Chuck Person of Auburn University
  • Emanuel Richardson of Arizona University
  • Anthony Bland of the University of Southern California

The defendants include:

  • James Gatto, director of global sports marketing at Adidas;
  • Merl Code, who recently left Nike for Adidas;
  • Christian Dawkins, an NBA agent who was fired in May from ASM Sports for charging approximately $42,000 in Uber charges on a player’s credit card;
  • Jonathan Brad Augustine, president of The League Initiative and program director of the Adidas-sponsored 1 Family AAU program;
  • Munish Sood, a financial adviser;
  • Rashan Michel, a former NBA official who founded Thompson Bespoke Clothing, a custom clothier for athletes.

The complaint alleges that Gatto paid certain high school basketball players and their families to sign with a school that has a sponsorship deal with Adidas. The documents state that Gatto paid out $250,000 in these alleged bribes:

Court documents state that Gatto, Code, Dawkins, Augustine and Sood allegedly made bribes to at least three high school players and/or their families. One situation involved $100,000 to commit to play at an Adidas-sponsored school. The second involved payments to commit to a certain school and then retain Dawkins’ services. The third involved as much as $150,000 to attend an Adidas-sponsored school, sign with Dawkins and also sign with Adidas.

A private school in Florida has a mention in the documents, but it is not named. CNBC said it could be University of Miami. The complaint also refers to a “public research university located in Kentucky,” but did not give out its name. ESPN claimed that sources told them that the school is the University of Louisville, which matches the numbers provided in the documents. From ESPN:

The allegations against the unnamed school in Kentucky, which is identified as “University-6” in the complaint, include payments of $100,000 from a sports apparel company to the family of an unnamed player, identified as “Player 10,” to ensure him signing with the school.

In a sworn statement from FBI agent John Vourderis, he wrote: “I have learned that in or around May of 2017, at the request of at least once coach from University-6, Dawkins, James Gatto, a/k/a “Jim,” Merl Code, Munish Sood, the defendants, and other agreed to funnel $100,000 (payable in four installments) from Company-1 to the family of Player-10. Shortly after the agreement with the family of Player-10 was reached in late May or early June, Player-10 publicly committed to University-6.”

The indictment also says that prior to paying Player-10’s family, the defendants “first needed time to generate a sham purchase order and invoice ostensibly to justify using Company-1 funds since they could not lawfully pay the family of Player-10 directly and risk that such prohibited payments be revealed.”

NBC News described the allegations against Person:

Person is an Auburn coach and former NBA star who was the fourth overall pick in the 1986 NBA draft and the rookie of the year the following season. He is accused of accepting approximately $91,500 from a business manager, who is cooperating with and worked for the government during the investigation, according to prosecutors. Person claimed he gave $18,500 of the money he accepted to two players’ families, the complaint states.

The business manager, who was unidentified by prosecutors, offered cash bribes to Person in an attempt to steer students to retain his services, as well as the services of a co-defendant, Rashan Michel, founder and owner of an Atlanta-based clothing company, according to court documents.

FBI arrests NCAA basketball officials on fraud and corruption charges from CNBC.

School Reactions

University of Louisville interim president Gregory Postel:

“Today, the University of Louisville received notice that it is included in a federal investigation involving criminal activity related to men’s basketball recruiting,” Postel said in the statement. “While we are just learning about this information, this is a serious concern that goes to the heart of our athletic department and the university. UofL is committed to ethical behavior and adherence to NCAA rules; any violations will not be tolerated. We will cooperate fully with any law enforcement or NCAA investigation into the matter.”

Oklahoma State University:

“We were surprised to learn this morning of potential actions against one of our assistant basketball coaches by federal officials,” read a statement from Oklahoma State. “We are reviewing and investigating the allegations. We are cooperating fully with officials. Let it be clear we take very seriously the high standards of conduct expected in our athletic department. We will not tolerate any deviation from those standards.”

USC:

“We were shocked to learn this morning through news reports about the FBI investigation and arrests related to NCAA basketball programs, including the arrest of USC assistant coach Tony Bland,” USC athletic director Lynn Swann said in a Tuesday statement. “USC Athletics maintains the highest standards in athletic compliance across all of our programs and does not tolerate misconduct in any way. We will fully cooperate with the investigation and will assist authorities as needed, and if these allegations are true, we will take the needed action.”

Auburn:

Auburn said in a statement that Person is suspended without pay effective immediately. “This morning’s news is shocking. … We are committed to playing by the rules, and that’s what we expect from our coaches,” the statement said.

Arizona

Adidas:

In a statement Tuesday, Adidas said it was unaware whether Gatto was allegedly arranging to pay high school players. “Today, we became aware that federal investigators arrested an adidas employee,” the company said. “We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

NCAA: