An Adidas executive and four NCAA assistant basketball coaches were indicted in a fraud and corruption scheme — which also included managers, financial advisers and representatives of a major international sportswear company — by federal authorities on Tuesday.
According to the FBI complaints made public, the four coaches involved are Auburn assistant Chuck Person, Southern California assistant Tony Bland, Arizona assistant Emanuel Richardson and Oklahoma State assistant Lamont Evans.
The six others named on court documents included: James Gatto (director of global sports marketing at Adidas), Merl Code (recently left Nike for Adidas), Christian Dawkins (NBA agent who was recently fired from ASM Sports for charging approximately $42,000 in Uber charges on a player's credit card), Jonathan Brad Augustine (president of The League Initiative and program director of the Adidas-sponsored 1 Family AAU program), Munish Sood (a financial adviser), and Rishan Michel (former NBA official who founded Thompson Bespoke Clothing line).
Gatto is now on administrative leave and the company is bringing in outside counsel for a thorough investigation. He appeared in federal court in Portland Tuesday and did not enter a plea. He will next appear in federal court in New York on Oct. 10.
Adidas issued the following statement, (before charging documents were released) in reference to Gatto: "Today, we became aware that federal investigators arrested an Adidas employee. We are learning more about the situation. We're unaware of any misconduct and will fully cooperate with authorities to understand more."
According to the complaint, Gatto, Code, Dawkins and Sood “worked together to funnel $100,000 from (Adidas) to the family of a high school player in exchange for (the player’s) commitment to play at an NCAA Division I university whose athletic programs are sponsored by (Adidas).” The school was cited only as University 6.
Gatto, Code, Augustine and Sod also allegedly agreed to make payments of as much as $150,000 from Adidas to another high school player to play at another school (referred to as University 7) in exchange for Dawkins’ services and a commitment to sign with Adidas after the player turned pro. Dawkins and Augustine also “agreed to facilitate payments to the family” of another unspecified high school player in exchange for that player’s commitment to University 6.
Gatto and Code were both charged with wire fraud conspiracy, two counts of wire fraud, and money laundering conspiracy, all with a potential maximum prison sentence of 80 years.
The company's stock dropped after news of the arrests.
Messages made by USA TODAY Sports to the NCAA on Tuesday morning were not immediately returned.
USC athletic director Lynn Swann said in a statement: "We were shocked to learn this morning through news reports about the FBI investigation and arrests related to NCAA basketball programs, including the arrest of USC assistant coach Tony Bland. USC Athletics maintains the highest standards in athletic compliance across all of our programs and does not tolerate misconduct in any way. We will cooperate fully with the investigation and will assist authorities as needed, and if these allegations are true, will take the needed actions."
Court documents reveal that the FBI and U.S. Attorney have been investigating the matter since 2015. The investigation revealed numerous instances of bribes being offered to potential student-athletes.
Names of specific schools involved were not named, only being referred to as University 3 — with numerals. One of the schools was based in the state of Kentucky and one of the schools was in the state of Florida.
Louisville acknowledged it is part of the investigation. The men's basketball program is on probation for NCAA violations after a former staffer was found to have arranged sexual favors for players and prospective recruits. That punishment was handed down in June.
"Today, the University of Louisville received notice that it is included in a federal investigation involving criminal activity related to men's basketball recruiting," a statement issued from interim president Greg Postel's office said. "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. U of L 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 profile of the school in Florida closely matches the University of Miami. The football and basketball programs were sanctioned by the NCAA in 2013 as part of a booster scandal that involved impermissible benefits. The probation for the violations ended last October.
"The University of Miami is aware of the indictments handed down today by the Department of Justice involving several men's college basketball programs, coaches, financial advisors, agents and apparel executives," Miami athletic director Blake James said in a statement. "As we are just learning the details, we cannot comment on the actions taken today by federal authorities. However, if requested, we will cooperate in any legal or NCAA review of the matter."
Both Miami and Louisville are sponsored by Adidas.
University 1 was identified as Auburn, where Person was employed as an associate head coach and where he had previously played college basketball.
The FBI alleges in one complaint unsealed Tuesday that “Person abused his coaching position (at Auburn) to solicit or obtain bribe payments” from a financial advisor for professional athletes. That financial advisor, who was not named in the indictment, was working with law enforcement as part of the investigation unbeknownst to Person and the other defendants.
Over a 10-month period, the financial adviser allegedly paid about $91,500 in bribes to Person in exchange for Person “agreeing to direct certain (Auburn) basketball players to retain the services (of the financial adviser) when those student-athletes entered the NBA.”
Person was suspended indefinitely without pay following his arrest. "This morning's news is shocking," Auburn president Steven Leath said in a statement released Tuesday on Twitter. "We are saddened, angry and disappointed."
Michel, described in the complaints as the founder and operator of a clothing company in Atlanta, runs suit outfitter Thompson Bestow. A review of his client list --- which is no longer available online --- includes Jadeveon Clowney of the Houston Texans, Sammy Watkins of the St. Louis Rams and Mike Evans of the Tampa Bay Buccaneers.