Adidas exec, two others convicted of wire fraud
Funneled money to basketball recruits
NEW YORK — Three college basketball recruiting insiders, including an Adidas executive, were convicted of wire fraud Wednesday in a corruption case that prosecutors said exposed the sport’s underbelly.
A jury in Manhattan federal court found the three guilty in a scheme to funnel tens of thousands of dollars in secret payments to families of high-level prospects so the players would commit to Adidas-sponsored schools.
The trial centered on whether the admitted efforts of the men — Adidas executive James Gatto, business manager Christian Dawkins and amateur league director Merl Code — to channel secret payments to the families was criminal. At stake was a fortune in revenue for the basketball programs and potential endorsement deals for the players if they went pro.
The verdict, which came after more than two days of deliberations following a three-week trial, delivered a victory to federal prosecutors and FBI agents in New York City, who spent more than three years investigating college basketball’s black market. Two more trials stemming from the probe are scheduled for next year.
In siding with prosecutors, the jury accepted the government’s theory that, by paying the families of five top recruits between $2,500 and $90,000, the men defrauded Louisville, Kansas and North Carolina State. The schools would not have awarded scholarships to those recruits if they had known about the illicit payments, prosecutors argued, and now face possible NCAA sanctions and financial penalties as a result.
Evidence included text messages between the defendants and coaches from top-tier coaches like Bill Self of Kansas and Rick Pitino of Louisville and testimony from the father of prized recruit Brian Bowen Jr. describing how a Louisville assistant handed him an envelope stuffed with cash.
Prosecutors claimed the schools were in the dark about the payment schemes, including $100,000 promised to Bowen’s family, that are outlawed by the NCAA. They accused the defendants of defrauding universities by tricking them into passing out scholarships to players who should have been ineligible.
Gatto, Dawkins and Code left court Wednesday without speaking to reporters, though one defense lawyer indicated there would be an appeal. Sentencing was set for March 5.
The three face potentially lengthy prison terms for convictions of wire fraud and wire fraud conspiracy. The convictions carry potential sentences of up to 20 years, but actual sentences can vary widely depending on a judge’s discretion. Legal observers expect sentences in excess of a few years each.