Top Menu

Technical Foul As DOJ Alleges Bribery In College Basketball

TIme Out

I don’t often go off-topic, but as a former college basketball player who was also active on the AAU basketball circuit it is hard to ignore the criminal charges announced today against 10 individuals, including four Division I NCAA men’s basketball coaches and a senior executive at a major athletic apparel company [Adidas], in connection with two related fraud and corruption schemes.

But then again, the matter is really not off-topic, because bribery and corruption is bribery and corruption regardless of whether a “foreign official” may be involved.

The U.S. can talk all about the corrosive effects of foreign bribery, but the allegations of bribery in these cases – adults seeking to profit from young student-athletes playing a game – are as bad as it gets and yet again provides a look in the mirror moment.

As stated in the release:

“In the first scheme, as alleged in the three Complaints unsealed today, college basketball coaches took cash bribes from athlete advisors, including business managers and financial advisors, in exchange for using their influence over college players under their control to pressure and direct those players and their families to retain the services of the advisors paying the bribes.  In the second scheme, a senior executive at Company-1, working in connection with corrupt advisors, funneled bribe payments to high school-aged players and their families to secure those players’ commitments to attend universities sponsored by Company-1, rather than universities sponsored by rival athletic apparel companies.”

The individuals charged with various wire fraud, bribery, travel act, and conspiracy offenses were four coaches:

  • Chuck Person (Auburn)
  • Lamont Evans (Oklahoma State)
  • Emanuel Richardson (Arizona)
  • Anthony Bland (USC)

Three athlete advisors:

  • Christian Dawkins (an NBA agent who was fired in May from ASM Sports)
  • Munish Sood (a financial advisor)
  • Rashan Michel (a former NBA official who founded Thompson Bespoke Clothing, a custom clothier for athletes).

A senior executive at Adidas James Gatto and two individuals affiliated with Adidas: Merl Code and Jonathan Augustine. (See here for the ESPN article with identifying information).

Under the heading “Overview of the Investigations,” the DOJ release states:

“The charges in the Complaints result from a scheme involving bribery, corruption, and fraud in intercollegiate athletics.  Since 2015, the U.S. Attorney’s Office for the Southern District of New York and the FBI have been investigating the criminal influence of money on coaches and student-athletes who participate in intercollegiate basketball governed by the NCAA.  The investigation has revealed two related schemes.  In the first scheme (the “Coach Bribery Scheme”), athlete advisors – including financial advisors and business managers, among others – allegedly paid bribes to assistant and associate head basketball coaches at NCAA Division I universities, and sometimes directly to student-athletes at those universities, facilitated by the coaches.  In exchange for the bribes, the coaches agreed to pressure and exert influence over student-athletes under their control to retain the services of the bribe-payors once the athletes entered the National Basketball Association (“NBA”).

In the second scheme (the “Company-1 Scheme”), athlete advisors working with high-level Company-1 employees, allegedly paid bribes to student-athletes playing at, or bound for, NCAA Division I universities, and to the families of such athletes.  These bribes were paid in exchange for a commitment by the athletes to matriculate at a specific university sponsored by Company-1, and a promise to ultimately sign agreements to be represented by the bribe-payors once the athletes entered the NBA.

Participants in both schemes allegedly took steps to conceal the illegal payments, including (i) funneling them to athletes and/or their families indirectly through surrogates and entities controlled by the scheme participants; and (ii) making or intending to make misrepresentations to the relevant universities regarding the involvement of student-athletes and coaches in the schemes, in violation of NCAA rules.

As described in the complaints, these schemes operated as a fraud on the universities involved, all of which provide scholarships to players and salaries to coaches with the understanding and expectation that the players and coaches are in full compliance with all relevant NCAA rules and regulations.  Moreover, these schemes subject the universities to substantial potential penalties by the NCAA, including, but not limited to, financial fines and penalties as well as the potential loss of eligibility to compete in various NCAA events.”

In this release, Acting Manhattan U.S. Attorney Joon Kim stated:

“The picture of college basketball painted by the charges is not a pretty one – coaches at some of the nation’s top programs taking cash bribes, managers and advisors circling blue-chip prospects like coyotes, and employees of a global sportswear company funneling cash to families of high school recruits.  For the ten charged men, the madness of college basketball went well beyond the Big Dance in March.  Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country, treating them as little more than opportunities to enrich themselves through bribery and fraud schemes.  The defendants’ alleged criminal conduct not only sullied the spirit of amateur athletics, but showed contempt for the thousands of players and coaches who follow the rules, and play the game the right way.”

FBI Assistant Director William Sweeney Jr. stated:

“Today’s charges detail a corrupt practice in which highly rated high school and college basketball players were steered toward lucrative business deals with agents, advisors, and an international athletics apparel company.  As alleged, NCAA Division I and AAU coaches created a pay-to-play culture, agreeing to provide access to their most valuable players while also effectively exerting their influence over them.  Today’s arrests should also serve as a warning to those who conduct business this way in the world of college athletics.”

Strategies For Minimizing Risk Under The FCPA

A compliance guide with issue-spotting scenarios, skills exercises and model answers. "This book is a prime example of why corporate compliance professionals and practitioners alike continue to listen to Professor Koehler."

Order Your Copy

Powered by WordPress. Designed by WooThemes