In this Sept. 26, 2017, file photo, acting U.S. Attorney for the Southern District of New York, Joon H. Kim, left, and FBI Assistant Director William Sweeney, Jr., right, hold a news conference to announce the first charges in their investigation into college basketball’s shadow economy. (AP Photo/Bebeto Matthews, File)
An Adidas executive conspired with several others to pay the families of players to ensure they committed to Kansas and North Carolina State, according to court documents unsealed in New York late Tuesday.
The allegations — which came in an indictment adding charges against Adidas global marketing director Jim Gatto, Adidas independent contractor Merl Code, and aspiring agent Christian Dawkins — drag two more top schools into the ongoing Justice Department probe of college basketball’s shadow economy.
The three men had faced one wire fraud charge connected to allegations they conspired to pay the parents of players to attend Louisville and Miami, both Adidas-sponsored schools, and to sign with Adidas when they turned professional. The new indictment adds charges related to those schemes, and also outlines similar allegations involving players who ultimately attended Kansas and North Carolina State.
In 2015, prosecutors allege, Gatto arranged a $40,000 payment, through an unidentified N.C. State coach, for the father of a North Carolina State recruit. From October 2016 through November 2016, according to the indictment, Gatto funneled $90,000 to the mother of a top high school player to ensure his commitment to Kansas.
The players are not identified in the indictments, but their career timelines resemble those of former N.C. State point guard Dennis Smith Jr., who was taken ninth overall in last year’s draft by the Dallas Mavericks, and former Kansas forward Josh Jackson, selected fourth overall in last year’s draft by the Phoenix Suns. A person close the investigation, who requested anonymity because he was not authorized to discuss the case publicly, confirmed the players referred to in Tuesday’s court documents include Smith and Jackson.
Other charges added Tuesday pertain to previous outlined allegations, that Gatto, Code and Dawkins conspired to pay the parents of a player and a travel basketball official to ensure the players committed to Louisville and Miami. The fraud charges are all based on the same disputed legal theory, proposed by federal prosecutors, that by paying the families of college players, Gatto and the others defrauded the universities, who could have been sanctioned by the NCAA for violations of rules regarding amateurism had these payments come to light.
The trial for Gatto, Code and Dawkins is scheduled for Oct. 1. Assistant coaches at Auburn, Oklahoma State, Arizona and Southern California, also charged in connection with allegations they took payments from an agent and a financial adviser and agreed to steer star athletes their way as clients, are scheduled for separate trials in 2019.
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