Ultimate college basketball corruption scandal primer: Explaining the latest with the FBI probe
After more than six months of public dormancy, thethe next stage of the corruption, fraud and bribery case that has loomed over college basketball since late September.
A superseding indictment (read: a new set of charges) was handed down on James Gatto, a former high-ranking employee at Adidas and one of the 10 men who were originally charged on Sept. 26, 2017, when the case went public. Included in the 36-page federal complaint are new details about how players were allegedly steered, with payments in the tens of thousands of dollars, to Kansas and North Carolina State through the conspiracy efforts of Gatto and others.
This story has a lot of entanglements and a lot of details. Further below, we’ll get into the important factors and info to know with many of the people affiliated with this story, but first here’s what you should broadly be aware of in the aftermath of Tuesday’s shakeup:
- Although the government’s case loomed like a moving cloud over college basketball for the past six months, the reality is the Department of Justice and the FBI have only made official announcements on two occasions in regard to this story. The first came on Sept. 26, 2017, when 10 men (including four assistant coaches) were arrested. The second movement was made Tuesday. In between that, college basketball held its 2017-18 season and its prestigious annual 68-team NCAA Tournament without interference from the federal government. Media reports in connection with the case did surface throughout the season, some of which included details that were publicly denied by some of the people named in said stories.
- This case came to be after the FBI ran a two-year investigation into nefarious, illegal schemes of fraud and corruption throughout college basketball’s recruiting channels. Those charged (all of whom are identified below) have yet to go to trial. No one has pleaded guilty. One person (James Brad Augustine) who was previously charged has had their case dropped.
- Tuesday’s superseding indictment brought no new defendants. This was a twist in the progress of the case, as many wondered not only when the FBI would make its next move, but when that time came who else might get pinched. If there is still more to come from the FBI, it’s unclear whether anyone else will be taken into federal custody other than the 10 men who already were.
- The FBI’s probe amounts to one of the biggest stories in college sports history because it involves the federal government intervening in the world of college recruiting, which has long been tainted by those willing to break rules at all costs in an effort to get the best high school players. Collegiate athletics has never seen anything like this, which is to, hopefully, stamp out some if not all of the issues highlighted by this very case.
- This is much bigger, and more consequential, than any NCAA investigation. Potential jail time awaits if those who have been charged wind up getting convicted. Some are questioning the legal grounds on which these three cases stand. The Department of Justice is building its argument around the idea that schools are the victims in these schemes. The FBI enhanced that argument Tuesday by . Despite this, some still wonder if prosecution will hold up in court.
- The NCAA has made no action on any school at this point, taking its cues from the federal government, which has explicitly told the NCAA to not do anything until it gives the OK to do so. Because of this, the (potentially elongated) timeline on NCAA sanctions to any coaches or programs is unclear. Nothing is expected to ruled on at the NCAA level before the start of next season.
- Schools are not on the hook. This was the case when Joon Kim was the acting United States Attorney for the Southern District of New York, and remains true with Geoffrey Berman now holding that post. USC, Arizona, Oklahoma State and Auburn each had an assistant coach implicated, but neither the schools themselves — nor the head coaches at those schools — have been levied with any allegations.
- Former Louisville coach Rick Pitino is the only head coach who has lost his job in relation to this story. And at this stage, there’s no indication that fact will change. Sean Miller remains at Arizona, Bruce Pearl remains at Auburn, Mike Boynton Jr. remains at Oklahoma State, and Andy Enfield remains at USC. All of their assistant coaches charged have had their contracts terminated.
Why are Kansas and North Carolina State now included?
The new, superseding indictment against Gatto, in the case that also/still includes previous charges against co-conspirators Merl Code and Christian Dawkins, lays out in detail the purportedly illegal schemes — notably wire fraud — put into play to ensure three players enrolled at Kansas and North Carolina State. For Kansas, why freshman Silvio De Sousa is one of the two unidentified Jayhawks players in the document linked above. Multiple other outlets, including Yahoo Sports and ESPN, cite sources that Billy Preston is the other Kansas player.
De Sousa played in 20 games for the Jayhawks last season. If it can be proven that his guardian — who has denied taking any money — did in fact receive funds the way the FBI alleges he did, then Kansas’ Big 12 titles and Final Four appearance from 2017-18 could be revoked by the NCAA.
Preston never played in the regular season or postseason for Kansas in 2017-18 after a single-car motor vehicle accident in November prompted an internal investigation by the university. The school had questions as to the financial situation of Preston having the car. In January, Preston left Kansas and pursued a career overseas. At this stage, no Kansas coach is caught in the crosshairs of this case because the federal complaint does not accuse any Kansas staff member of knowing about or being party to any alleged pay-for-play scheme.
That’s not the case with North Carolina State. The Wolfpack in NC State’s section of the indictment, had his father receive $40,000 in cash to secure his commitment to NC State. That money, as far as the FBI is concerned, was withdrawn by a co-conspirator (“CC-3” in the indictment) who then gave the money to an NC State coach. Unlike Kansas, the indictment specifically notes that at least one coach at NC State was actively involved in paying Smith’s father in order to keep Smith at NC State. The Herald Sun and News Observer of Raleigh put the pieces together to show the coaches who are candidates likely to be “Coach-4” in the indictment.. We now know why. It is alleged that former player Dennis Smith Jr., the only person who fits the FBI’s description
The federal complaint includes this passage:
In or around September 2015, the student-athlete publicly committed to attend North Carolina State University, and to play for its men’s basketball team beginning in the fall of 2016. Shortly thereafter, and based on concerns that the student-athlete might change his mind and select another university, James Gatto, a/k/a “Jim,” the defendant, and CC-3, among others, agreed to make a payment to Parent-1 to ensure that the student-athlete remained committed to North Carolina State University.
The payments, per the FBI, were also made in part to ensure Smith would sign with Adidas upon going to the NBA. Smith, who just finished his rookie season with the Dallas Mavericks, is instead now endorsed by Under Armour. Mark Gottfried was fired in February 2017, as he was coaching Smith in his one and only year of college basketball. Gottfried was hired in March as the head coach of Cal State Northridge.
Louisville and Miami were in the latest indictment along with Kansas and NC State, but there is no new information regarding either school. In fact, the language in Miami’s section appears much less incriminating than the initial indictment file from September.
Teams involved in the FBI investigation
Other key details
- Who is still involved: Financial advisers, former NBA agents, Adidas representatives and assistant coaches.
- The corruption: The aforementioned money men linked up with assistants to funnel players to schools with specific ties to shoe companies. Cash was exchanged when money managers and advisers (among others) wound up “secretly funneling cash to the families of high school recruits,” according to the District Attorney’s office. Sometimes that money was delivered in cloaked ways, like through a youth grassroots basketball program.
- There are three separate, official complaints tied to the two schemes. The first scheme was to get assistant coaches to lure players to specific college programs. The second scheme was to get money to the families of those players. The goal was for the player to have an allegiance to the shoe company (Adidas) after he left college.
- It all started with a cooperating witness. How did the FBI manage to get involved in the shrouded world of college recruiting? An unidentified financial advisor (later revealed as Martin Blazer), who was charged in 2016 by the Securities and Exchange Commission with fraud, became cooperating witness after those charges were filed. Blazer informed the FBI, as means of cooperation, that he could bring light to fraud and corruption in the world of college recruiting because he had been party to it in the past.
- The bribes: The alleged payments ranged from $13,000 to $100,000, according to authorities.
- Two undercover agents were used in this process. There were hundreds of conversations covertly recorded. The FBI is not working in the dark; it has coaches accepting bribe money in person from undercover agents and has on tape those coaches speaking on being party to the illegal schemes. There are hundreds of hours of phone conversations that were retrieved via wiretap.
- The NCAA was not notified of the investigation as it was happening. “The nature of the charges brought by the federal government are deeply disturbing. We have no tolerance whatsoever for this alleged behavior,” NCAA President Mark Emmert said in September. “Coaches hold a unique position of trust with student-athletes and their families and these bribery allegations, if true, suggest an extraordinary and despicable breach of that trust. We learned of these charges this morning and of course will support the ongoing criminal federal investigation.”
- There is a hotline number. The FBI and U.S. Attorney’s Office created a tip line specifically for this investigation, or for any coaches potentially involved in nefarious activity to call: 212-384-2135.
The new information …
- CC-3. Tuesday’s indictment introduced a new actor in this case, a person identified as Co-Conspirator 3, or “CC-3” for short. Who is it? A source with intimate knowledge of the case confirmed to CBS Sports what The New York Times and Yahoo Sports previously reported: a man named T.J. Gassnola is CC-3. He has been affiliated with former NBA agent Andy Miller, according to Yahoo Sports, which broke the Andy Miller/Christian Dawkins expense report story in February.
Gassnola, according to the indictment, would have been a key piece in helping move tens of thousands of dollars to the families/representatives of De Sousa, Preston and Smith. As a formal workaround of this, Gatto filed what the FBI labels as “sham invoices” in order to pay Gassnola back. Gassnola used to run a grassroots program out of Massachusetts known as the New England Playaz. In 2012, Gassnola’s program was one of four that was to ZagsBlog that he was no longer in charge of the Playaz.due to ties to an agent (Miller). In February, Gassnola confirmed
Given Gassnola’s undisclosed identification in the indictment, experts believe he is cooperating with federal authorities in this investigation. Among other transgressions alleged by authorities, Gassnola is said to have delivered $50,000 total to two hotel rooms, in New York City and Las Vegas, to a relative of Preston’s.
- Jonathan Brad Augustine, former director of an Adidas-sponsored program: Augustine is no longer a part of this case, as his charges were dropped after the FBI discovered he pocketed money initially intended to be used to steer players to universities. Sources told CBS Sports that Augustine, who was connected with Miami’s recruitment of Nassir Little (who later committed to UNC), misrepresented the situation to other parties. Augustine, per sources with intimate knowledge of the case, told CBS Sports that he concocted a scheme to try and get paid for Little without the knowledge of Little’s parents, who signed sworn affidavits claiming they never discussed nor accepted money for their son’s recruitment.
“What happened was Augustine made it up,” one source said about Augustine’s alleged money ploy to get Little to Miami.
- Munish Sood, financial adviser: Along with Dawkins, the U.S. Attorney’s office alleges he was a power broker in helping move approximately $250,000 to families of high school basketball players with the help of Gatto. But Yahoo Sports on Wednesday made note of the conspicuous absence of Sood in the superseding indictment:
One of the clearest indications that people are talking to authorities is the disappearance of the name of Munish Sood, a New Jersey-based financial adviser originally charged in September, from the paperwork. He’d been charged for his role in funneling money to the father of former Louisville recruit Brian Bowen. … Sometime between late September 2017 and April 2018, Munish Sood became co-conspirator 1, which outside experts say is an indication of cooperation with the authorities. He’s one of three co-conspirators mentioned in the superseded indictment released Tuesday.
And original charges …
- Jim Gatto, director of Adidas global sports marketing: Accused of paying families of high-profile recruits to play for Adidas-affiliated schools, most notably Louisville, NC State and Kansas. Money exchanged with two of the families was $100,000 and $150,000, according to the FBI.
- Merl Code, recently left Nike for Adidas: A right-hand man for Gatto involved in many of these exchanges, according to the complaint.
- Christian Dawkins, former NBA agent-in-training at ASM Sports: Broker who organized the deals between the assistant coaches and Gatto. He was caught on a wire saying, “If you’re going to fund those kind of guys, I mean we’d be running college basketball.” Dawkins’ purported expense reports were the documents at the center of Yahoo Sports’ story from February that .
- Rashan Michel, representative of Thompson Bespoke Clothing, former NCAA referee: Involved most intensely in dealing with former Auburn assistant Chuck Person.
- Emanuel “Book” Richardson, Arizona assistant: Spent the previous eight season under Sean Miller at Arizona, accused of paying “Player-5” $5,000 in bribe money (in original indictment) to funnel player to Arizona, fired by the Wildcats. Richardson is quoted, via wiretap, as saying the player would be “on campus” the weekend of June 24 and would be “likely” to commit to Arizona, while also requesting more money. That corresponds with the official visit for five-star point guard Jahvon Quinerly. On Aug. 8, 2017, Quinerly committed to Arizona; he is now signed to play at Villanova. Richardson is also accused of accepting $20,000 in bribe money last June and July, in New York and New Jersey.
- Chuck Person, Auburn assistant and former NBA player: An Auburn alum, Person spent 27 seasons as a player, coach and executive in the NBA before joining Bruce Pearl’s staff in 2014, accused of handling a total of $141,500, fired by Auburn. From complaint: “In addition, Chuck Connors Person, arranged for Witness to make payments directly to the families of the players Person was steering to Witness. These payments defrauded University by depriving it of the financial aid University continued to award to the relevant student athletes under false pretenses.” The feds allege that Person accepted $91,500 from Martin Blazer, the financial adviser — unnamed in the report — who acted as the cooperating witness in the FBI’s case. Person met with the FBI’s informant and Michel last December. Person took $50,000 in cash as a bribe to steer a player to Michel’s interests, the suit alleges.
- Lamont Evans, Oklahoma State assistant: Promoted in the spring of 2017 to associate head coach at after OSU hired Mike Boynton Jr. to succeed former Cowboys coach Brad Underwood, accused of accepting bribe money at South Carolina and at Oklahoma State, fired by the Cowboys. Allegations are that he received at least $22,000 in bribe money to “exert his influence over certain student-athletes” at both South Carolina and Oklahoma State.
- Tony Bland, USC assistant: Named the associate head coach under Andy Enfield in 2014; charged with conspiracy to commit bribery, soliciting a bribe and wire fraud; fired by the Trojans. Bland has been charged with providing $9,000 cash payments to the families of two current USC players. Kim said at his press conference on Tuesday that Bland used these words to the financial advisers also facing charges: “I can definitely mold the players and put them in the lap of you guys.”
In terms of the investigation, no one can predict the course of play for the Department of Justice and the FBI. If witnesses are cooperating, the timeline could be flexible. It’s uncertain whether or not the DOJ will release another indictment filing or not, and if that were to happen, when it might come. It took more than six months for the second filing to land. It might be at least another six months before we hear from the feds again — or Tuesday’s news could be the last set of charges assessed in this case.
What is known are the court dates for the men who have been charged:
Gatto, Dawkins and Code will go to trial on Oct. 1.
Person and Michel go to trial on Feb. 4, 2019.
Richardson, Evans and Bland go to trial on April 22, 2019.