College basketball bribery scandal arrests - Business Insider
The FBI arrested 10 people on charges of fraud and corruption in college basketball on Tuesday.
The Department of Justice announced Tuesday that college basketball coaches at University of Arizona, Auburn, University of Southern California, and Oklahoma State University had been arrested, as well as managers, financial advisors, and representatives of a major international sportswear company.
Jim Gatto, director of global sports marketing for basketball at Adidas, was also named as a defendant. According to the complaint, Gatto allegedly conspired with coaches to pay high school athletes to play at universities sponsored by Adidas (referred to as "Company 1" in the case).
The investigation, which was been in progress since 2015, has been led by the FBI and the US Attorneyās office for the Southern District of New York. Three separate complaints have been filed.
Gatto and four other defendants have been charged with "making and concealing bribe payments" to high school student athletes and/or their families.
In one instance, Gatto and the other defendants reportedly funneled $100,000 to the family of a high school basketball player to convince the player to sign with a "public research university" in Kentucky. According to an undercover agent investigating the case, Gatto told other defendants that the payment was "on the books" at Adidas, but "not on the books for what it's actually for."
The complaint doesn't name the university. Based on details provided, it is likely the University of Louisville, which signed a
$160 million sponsorship deal with Adidas in August.
In another case, Gatto and other defendants allegedly agreed to make payments of up to $150,000 from Adidas to convince the player to join another team sponsored by the apparel company, according to filings. The university is not named, but based on the information provided, itās likely the University of Miami,
which entered into a 12-year partnership with Adidas in 2015.
"Today, we became aware that federal investigators arrested an Adidas employee," an Adidas spokesperson said in an email to Business Insider. "We are learning more about the situation. We're unaware of any misconduct and will fully cooperate with authorities to understand more."
Other defendants include Jonathan Brad Augustine, president of nonprofit The League Initiative; Merl Code, the head of Nikeās Elite Youth Basketball League as of 2013; and Christian Dawkins, a former sports agent who was reportedly fired in May for charging $42,000 in Uber rides on an NBA playerās credit card. Gatto and other defendants reportedly used apparent payments to the nonprofits as a way to conceal bribes paid to players and their families.
The coaches named as defendants in the cases include Anthony āTonyā Bland, associate head coach at University of Southern California and former assistant coach at San Diego State; Chuck Connors Person, associate head coach at Auburn University; Lamont Evans, associate head coach and recruiting coordinator for Oklahoma State Universityās basketball team and former South Carolina assistant coach; and Emmanuel Richardson, an assistant coach for University of Arizona.
The
multi-million dollar battle for top-tier college basketball teams is hard fought amongst sportswear giants. The visibility of being worn by a certain team or high-profile player is a valuable marketing opportunity for apparel companies, despite the fact that NCAA players cannot be paid to endorse brands.
In the 2016 NCAA men's basketball tournament, Nike was the clear leader, providing uniforms for 41 entrants, the Baltimore Sun reported. Adidas provided outfits for 14 teams, Under Armour outfitted 10 teams, and Russell Athletic outfitted three.
Under Armour has made major investments in college basketball in recent years. In 2016, the company made a $280 million agreement to replace Adidas as the UCLA men's basketball team's shoe and apparel sponsor for the next 15 years. Under Armour has also cut deals in recent deals with teams including Notre Dame, Auburn, and Wisconsin.
