Federal investigators have brought the underground college basketball economy out into the open, and it's a story that's only beginning to shake the foundation of the sport.
Ten people, including four assistant coaches, were arrested on federal criminal charges of fraud and corruption after an FBI investigation. The list includes assistant coaches Chuck Person of Auburn, Tony Bland of Southern California, Book Richardson of Arizona and Lamont Evans of Oklahoma State. The arrests also included James Gatto, director of global sports marketing for Adidas.
"Since 2005, the FBI and USAO have been investigating the criminal influence of money on coaches and student-athletes who participate in intercollegiate basketball governed by the NCAA. As relevant here, the investigation has revealed numerous instances of bribes paid by athlete advisers, including financial advisers and business managers, among others, to assistant and associate basketball coaches employed by the NCAA Division I universities, and sometimes directly to the student-athletes at NCAA Division I universities as facilitated by the coaches, in exchange for those coaches exerting influence over student-athletes under their control to retain the services of the bribe-payers once the athletes enter the NBA."
There are 120 pages in three complaints detailing charges and evidence. However, one of the schools launched to the forefront of the scandal is one that is not actually mentioned by name in those 120 pages. In the documents, it is referred to only as "University-6."
The four named assistant coaches are charged with accepting bribes to influence their players to work with certain advisers and managers. "University-6" is tied to the alleged actions of Gatto and others, who are accused of funneling money to the family of a player to secure his commitment to play basketball for the university, then sign with a company after turning pro (the company is not named in the complaint, but it has been identified as Adidas in multiple news reports; as mentioned, Gatto works for Adidas).
"University-6" is described as a public university in Kentucky with 22,640 students, a description that matches Louisville, which is sponsored by Adidas. Louisville confirmed that it had been notified of its involvement in a federal investigation.
"Today, the University of Louisville received notice that it is included in a federal investigation involving criminal activity related to men's basketball recruiting," University of Louisville interim president Gregory 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."
The most high-profile incident detailed in the complaint was alleged to have happened in May: The complaint alleges that Gatto and the others "worked together to funnel $100,000 from Company-1 to the family of a high school basketball player" so he'd commit to the school.
In detailing the allegations, the complaint says, "The bribe money was structured in a manner so as to conceal it from the NCAA and officials at University-6 by, among other things, having Company-1 wire money to third-party consultants who then facilitated cash payments to Player-10's family."
There's a second recruit, labeled "Player-11," and the complaint continues:
"Noting that University-6 was already on probation with the NCAA, Dawkins indicated that they would have to be particularly careful with how they passed money to Player-11 and his family. Coach-1 agreed, stating, 'We gotta be very low-key.'"
The complaint goes on to state:
"At the meeting, Augustine stated that he expected Company-1 to fund at least a portion of the future payments to Player-11 and/or his family because, referring to a coach for the University-6 men's basketball team ('Coach-2'), 'No one swings a bigger d--- than [Coach-2]' at Company-1, adding that, 'all [Coach-2 has to do] is pick up the phone and call somebody, [and say] these are my guys, they're taking care of us."
Three years ago, Pitino publicly criticized the influence of sneaker companies on college basketball. Last month, Louisville celebrated a new 10-year, $160 million deal with Adidas. According to USA Today, Pitino received $2.25 million from Adidas as part of his contract during the 2015 calendar year.
Pitino released a statement on Tuesday night denying any knowledge of the allegations, calling them a "complete shock."
Here is the first statement from Louisville coach Rick Pitino since news broke this morning pic.twitter.com/WvZ55j3fHp— Eric Crawford (@ericcrawford) September 26, 2017
The influence of sneaker companies, beyond the publicly celebrated big-money contracts, and the shady dealings of college basketball recruiting have been one of the worst-kept stories in sports for years. Tuesday, however, was a game-changer. After all, the federal government is involved, and the charges announced were hardly the end of this scandal.
William F. Sweeney, the assistant director in charge of the New York office of the FBI, gave a "warning to others" in which he said, "We have your playbook." He characterized this as an ongoing investigation. Joon H. Kim, the acting U.S. attorney for the southern district of New York, encouraged others to come forward with information, saying, "It's better for you to be calling us than us calling you."
NEW: FBI and U.S. Attorney's Office establishes special phone number for information RELEVANT to NCAA investigation, 212-384-2135. https://t.co/1lFKOybrBx- Tom Winter (@Tom_Winter) September 26, 2017
NCAA president Mark Emmett released a statement on Tuesday afternoon:
NCAA statement from Mark Emmert pic.twitter.com/iNsULEWhOI- NCAA (@NCAA) September 26, 2017
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