Adidas executive James Gatto handed more criminal counts in college basketball probe

Federal prosecutors in New York on Tuesday added additional criminal counts to the indictment of Adidas executives James Gatto, alleging he conspired to provide cash payments to the families of former basketball players at Kansas, Louisville, Miami and NC State.

It marks the first time Kansas and North Carolina State have been mentioned in the list of universities caught up in the federal bribery scandal in college basketball.

The superseding indictment also alleges that Adidas consultant Merl Code and Christian Dawkins, a runner for former NBA agent Andy Miller, conspired with Gatto to commit wire fraud and pay $100,000 to the father of Louisville recruit Brian Bowen.

Gatto, Code and Dawkins were among 10 men arrested in late September following the FBI’s clandestine investigation into bribes and other corruption in college basketball. They are scheduled to go on trial at U.S. District Court in New York in October.

The new indictment alleges Gatto and another unidentified Adidas consultant conspired to provide at least $90,000 to the mother of a former Kansas player between October 2016 and November 2017, and at least $20,000 to the legal guardian of a second player who committed to the Jayhawks in August 2017.

A federal indictment released on Tuesday alleges the payments were made to ensure the players signed with Kansas and then endorsement deals with Adidas once they turned pro. The indictment says the payments were concealed from the university and NCAA.

The indictment says Gatto and others concealed payments to the first Kansas player by transferring money to an AAU team controlled by the player’s mother. The unidentified Adidas consultant delivered $30,000 to the mother at a hotel room in New York on Oct. 31, 2016 and another $20,000 in cash at a hotel room in Las Vegas on Jan. 19, 2017. The consultant also wired $15,000 to the player’s mother on June 14, 2017.

In August 2017, the indictment alleges, the second Kansas player’s legal guardian informed the first player’s mother that the player had received illicit payments to attend a school sponsored by one of Adidas’ rivals. The guardian told the first player’s mother that the student-athlete was more interested in attending Kansas, but would need to repay payments from the rival apparel company in order to do so.

The second player announced he would enroll at Kansas on Aug. 30, 2017, according to the indictment, and on Sept. 11, 2017, Gatto was informed by the unidentified Adidas consultant that he would need to make “another $20,000 payment” to the player’s guardian to help the student-athlete “out from under” the deal to sign with the other school.

The indictment also alleges that Gatto and others conspired in 2015 to funnel approximately $40,000 from Adidas to the father of a player who was “widely considered the top high school recruit in the state of North Carolina and who had played for an [Adidas-sponsored] AAU team” to ensure that he signed with the Wolfpack and signed an apparel deal with Adidas once he turned pro.

The unidentified player committed to NC State in September 2015, but wasn’t happy with his decision and was considering de-committing about a month later, according to the indictment. Gatto and the unidentified Adidas consultant agreed to make a $40,000 payment to an unnamed NC State coach, who would then deliver it to the player’s parent, the indictment alleges. The payments were concealed from NC State officials and the NCAA, according to prosecutors.

The indictment says the player enrolled at NC State for the 2016-17 season and entered the NBA draft in June 2017.

The superseding indictment released on Tuesday also includes details of schemes to funnel $100,000 to Bowen’s father and $150,000 to the family of an unidentified high school player being recruited by Miami. Those allegations were included in the original indictment against Gatto, Code and Dawkins.

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