College basketball world stunned by FBI's pay-for-play allegations

It took a few hundred thousand dollars slipping through the cracks of the multibillion-dollar college sports industry to rock the college basketball world this week.

“Today, we announce charges of fraud and corruption in the world of college basketball,” said Joon H. Kim, the acting U.S. attorney for the Southern District of New York, in a press conference.

On Tuesday, the FBI filed criminal charges against 10 individuals involved in a pay-for-play scheme for college athletes, arresting four assistant coaches at Division I basketball programs. The fallout from the investigation at the implicated programs took its first victims on Wednesday as Louisville athletic director Tom Jurich and head basketball coach Rick Pitino were put on leave.

The criminal charges stem from a system of underground financial transactions that funneled money from sports apparel companies and professional athlete representatives to coaches and student-athletes.

The money was used in bribes to convince athletes to enroll at the universities or to pressure them to sign with the agents or apparel companies after leaving the universities.

While Adidas is the only apparel company to confirm an involvement in the criminal complaint, the investigation is ongoing and not all names associated with the report have been confirmed. Allegations of involvement by another apparel company suggest that a more wide-ranging case could be still to come. 

The complaint refers to phone calls between Adidas director of global sports marketing Jim Gatto and Merl Code, another Adidas employee. The FBI intercepted the calls via a wiretap.

“During those calls,” the criminal complaint reads, “Gatto and Code discussed, among other things, Coach-3’s request to Gatto that Company-1 make a $150,000 payment to Player-12 in order to prevent Player-12 from committing to attend another NCAA Division I university sponsored by a rival athletic apparel company that allegedly had offered Player-12 a substantial sum of money.”

Adidas has released a statement confirming the arrest of an employee.

“Today, we became aware that federal investigators arrested an Adidas employee,” the statement read. “We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

Auburn, Oklahoma State, Arizona and Southern California have also released statements confirming that assistant coaches from their basketball programs were among those arrested.

All of these parties have expressed that they were unaware of the scheme and that they will cooperate in the FBI investigation. 

Another school implicated in the schemes is Louisville, an ACC member that is already facing NCAA probation for a scandal involving using prostitutes to entice recruits. Gatto, Code, former sports client manager Christian Dawkins, an Adidas-sponsored AAU team basketball coach Jonathan Augustine and financial consultant Munish Sood are all defendants associated in the Louisville scheme.

Louisville was referred to only as “University-6” in the complaint, but the university confirmed the identification. The University formally took the step of putting Pitino and Jurich on leave. Pitino is a Hall of Fame coach who has been with the school since 2001, winning an NCAA championship in 2013. Jurich has overseen Louisville's nationally successful athletic programs since 1997.

From May of this year until September, the complaint alleges that “the defendants, and others known and unknown, conspired to illicitly funnel $100,000 from Company-1 to the family of Player-10.”

The findings further state that the player committed to the university “on or about June 3, 2017,” and that press accounts referred to the commitment as a “’surprise commitment’ that ‘came out of nowhere.’” These facts and others mentioned suggest that the recruit in question is Brian Bowen, the last five-star recruit from the class of 2017 to commit to a school. Bowen was still listed on the Louisville basketball roster late Tuesday night.

As the FBI conducts interviews, the investigation is all but certain to bring more players and universities into the fold. Until the investigation draws to a close, the question of how widespread these schemes were will continue to hang over college basketball.

@James_Tatter

sports@dailytarheel.com