A US college basketball bribery scandal leads to arrests of 10 people -- including an Adidas executive

  • Ten people were arrested in connection to an FBI investigation on college basketball bribery.
  • An Adidas executive was arrested on suspicion of paying thousands of dollars in bribes to athletes to persuade them to attend universities sponsored by the sportswear brand.
  • Assistant coaches at Arizona, Auburn, USC, and Oklahoma State have been accused to taking thousands of dollars in bribes to pressure NCAA athletes to hire certain financial advisers and business managers.

The FBI arrested 10 people on charges of fraud and corruption in men’s college basketball on Tuesday.

The Department of Justice announced Tuesday that assistant coaches at Arizona, Auburn, USC, and Oklahoma State had been arrested along with managers, financial advisers, and representatives of the international sportswear company Adidas.

Jim Gatto, the director of global sports marketing for basketball at Adidas, was among the defendants. Gatto is accused of conspiring 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 had been in progress since 2015, was led by the FBI and the US Attorney’s 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 are accused of funelling $US100,000 to the family of a high-school basketball player to persuade the player to sign with a “public research university” in Kentucky. An undercover agent investigating the case said 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, but, based on details provided, it is most likely Louisville, which signed a $US160 million sponsorship deal with Adidas in August.

In another case, Gatto and the other defendants are accused of agreeing to make payments of up to $US150,000 from Adidas to persuade a player to join another team sponsored by the apparel company, according to filings. The university is not named but, based on the information provided, is most likely Miami, which entered a 12-year partnership with Adidas in 2015.

“Today, we became aware that federal investigators arrested an Adidas employee,” an Adidas representative told Business Insider in an email. “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, the president of the nonprofit The League Initiative; Merl Code, a former Nike employee currently linked to Adidas; and Christian Dawkins, a former sports agent who was reportedly fired in May after being found to have charged $US42,000 in Uber rides on an NBA player’s credit card. Gatto and other defendants are accused of using apparent payments to the nonprofits as a way to conceal bribes paid to players and their families.

The assistant coaches named as defendants in the cases are Anthony “Tony” Bland of USC, Chuck Connors Person of Auburn, Lamont Evans of Oklahoma State, and Emmanuel Richardson of Arizona. The coaches allegedly took bribes from financial advisors and business managers in exchange for pressuring student athletes to hire the individuals.

The multimillion-dollar battle for top-tier college basketball teams is hard fought among sportswear giants. The visibility of high-profile teams and players is a valuable marketing opportunity for apparel companies, even though NCAA players themselves cannot be paid to endorse brands.

The Baltimore Sun last year reported that Nike was the clear leader in the 2016 NCAA men’s basketball tournament, providing uniforms for 41 entrants. Adidas provided outfits for 14 teams, Under Armour outfitted 10 teams, and Russell Athletic outfitted three.

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