Sports

Here’s a master guide to the college basketball corruption scandal and FBI investigation

The recruitment of NC State’s Dennis Smith Jr.

Fayetteville's Dennis Smith Jr. was one of the most sought after recruits in America and committed to NC State in 2015. He was he highest-rated recruit to commit to the Wolfpack and coach Mark Gottfried.
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Fayetteville's Dennis Smith Jr. was one of the most sought after recruits in America and committed to NC State in 2015. He was he highest-rated recruit to commit to the Wolfpack and coach Mark Gottfried.

A bombshell threatening the integrity of college basketball dropped in the fall of 2017, when unsealed court documents revealed details of a two-year FBI investigation into bribery and fraud in the sport.

Here is an outline of the investigation from its start. It will be updated as new developments unfold.

What is the FBI college basketball case about?

Three complaints by the U.S. Attorney’s office for the Southern District of New York and the FBI, unsealed on Sept. 26, 2017, alleged pay-to-play schemes surrounding college coaches, sports agents and sports apparel company representatives, and college and high school players and their families.

A superseding indictment handed down on April 10 offered more insight into the alleged underbelly of the sport.

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Between those releases, there have been federal subpoenas and investigations and firings within college basketball programs.

Schools named in the original complaints have been identified as Louisville, Miami, Auburn, South Carolina, Oklahoma State, Arizona and Southern Cal. Four adidas-sponsored universities are named in the superseding indictment: Kansas, Louisville, Miami and N.C. State.

What were the schemes?

One scheme involved paying players or their family members to ensure they would attend schools sponsored by adidas and then sign with the apparel company upon going pro. The other involved paying coaches to influence players on which professional sports agents to choose after turning pro.

Acting U.S. Attorney for the Southern District of New York Joon H. Kim announces charges stemming from an FBI investigation into top NCAA basketball programs that also involved a corrupt scheme with a major sportswear company.

“Many such coaches have enormous influence over the student-athletes who play for them, in particular with respect to guiding those student-athletes through the process of selecting agents and other advisers when they prepare to leave college and enter the NBA,” FBI special agent John Vourderis wrote in the original indictment. “The investigation has revealed several instances in which coaches have exercised that influence by steering players and their families to retain particular advisers, not because of the merits of those advisers, but because the coaches were being bribed by the advisers to do so.”

Who has been indicted?

In September 2017, the Justice Department announced it had indicted and arrested 10 people, including four college basketball assistant coaches, business managers, financial advisers and adidas employees:

Chuck Person, an assistant at Auburn, where he played before playing and coaching in the NBA. Person is accused of abusing his coaching position to obtain $91,500 in bribe payments from an unnamed financial adviser and business manager for professional athletes. The adviser was working for the government as an informant. In exchange, Person steered Auburn athletes with NBA potential to retain the services of the informant and Atlanta clothier Rashan Michel, according to court documents. Person and Michel were also charged with participating in a scheme to defraud Auburn (listed as University-1 in the federal indictments), “by making and concealing bribe payments to student-athletes at (Auburn) and/or their families.”

Rashan Michel, the owner of Atlanta clothier Thompson Bespoke and former NBA and college basketball referee who moved to Charlotte in 2017 with plans to open a second store. Michel is accused of brokering bribes of Person and other assistant coaches, and working with Person in a scheme to bribe Auburn student-athletes and their families.

Emanuel “Book” Richardson, an assistant at Arizona under coach and former N.C. State assistant Sean Miller, was charged with soliciting and accepting bribes.

Tony Bland, an assistant at Southern Cal, was charged with soliciting and accepting bribes.

Lamont Evans, an assistant at Oklahoma State, was charged with soliciting and accepting bribes.

Jim Gatto, who has been placed on administrative leave from his role as head of basketball global sports marketing at adidas (listed as Company-1 in the federal indictments), is accused of funneling payments to high school players and their families in exchange for the players committing to adidas-sponsored schools and signing with the company upon turning pro. In the superseding indictment, Gatto was accused of working with an unnamed N.C. State coach to funnel money to the father of a player believed to be Dennis Smith Jr.

Merl Code, a former consultant of adidas’ programs for high school and college basketball programs, Code is accused with Gatto of conspiring with coaches to bribe players. Code “participated in organizing some of the payments made from Company-1 to players and their families,” the documents say.

Christian Dawkins, a former associate at the agency ASM Sports, where he worked to recruit athletes as clients, allegedly conspired with Gatto and Code to funnel money from adidas to high school athletes and their families, and was charged with bribing college coaches, according to the complaint.

Munish Sood, a financial adviser, allegedly conspired with Gatto, Code and Dawkins to funnel about $100,000 from adidas to the family of a high school All-American player, later identified as Louisville and N.C. State recruiting target Brian Bowen, and bribed coaches, the documents say.

Jonathan Brad Augustine, the program director of Orlando-based AAU program 1Family Hoops, which is sponsored by adidas. He was also the AAU coach of Nassir Little, a UNC signee who appeared to be in a bidding war between Miami and Arizona, according to the FBI indictments. Augustine was initially accused of bribery and brokering corrupt deals with high school athletes.

Augustine and Sood were not named, however, in the superseding indictment.

The fraud charges against Augustine were dropped in February, apparently because he told prosecutors he never intended to pay the players and their families and had kept the little money paid out in deals for himself, according a story by The Washington Post. The fact that Sood was no longer named in the new indictment suggests cooperation with authorities, outside experts told CBS Sports.

How were local schools or players involved in the case?

Schools and individuals with ties to the Triangle are mentioned in the federal documents, and N.C. State is one of the four schools named in the superseding indictment.

In the days after the original complaints, spokespersons for N.C. State, North Carolina and Duke said their schools had not been contacted by the FBI or NCAA regarding the investigation.

On Oct. 25, 2017, Duke coach Mike Krzyzewski said he doesn’t believe corruption is rampant in the sport – that “just like anything, there’s a chance that something wrong is happening.”

After a Feb. 15 Yahoo article said hall of fame coaches and half of the NCAA tournament’s initial top-16 teams “should be scared” about the FBI’s next move in the investigation, UNC coach Roy Williams on Feb. 16 said he was confident his program wasn’t involved with paying recruits. Krzyzewski on Feb. 18 said had hadn’t been following the Yahoo reports. N.C. State coach Kevin Keatts on Feb. 19 said N.C. State had not been contacted as part of the FBI investigation and that, “We are 100 percent not involved in this.”

But on Feb. 23, Yahoo Sports published two reports based on documents obtained during discovery of the federal investigation that it said provided “a clear-eyed view into the pervasive nature of the game’s underground economy.”

“These allegations, if true, point to systematic failures that must be fixed and fixed now if we want college sports in America,” NCAA President Mark Emmert said in response to the Yahoo reports. “Simply put, people who engage in this kind of behavior have no place in college sports.”

The documents in the Yahoo reports named coaches and players affiliated with Triangle-area colleges, including former N.C. State head coach Mark Gottfried, former assistant Orlando Early, former assistant Butch Pierre and former Wolfpack guard Dennis Smith Jr.

N.C. State and UNC officials said they were unfamiliar with the information in the reports related to their schools, but that they would cooperate with investigators. Duke released a statement saying it “immediately reviewed the matter and, based on the available information, determined there are no eligibility issues related to today’s report.”

How was NC State involved in the case?

A March 9 article by The Washington Post revealed N.C. State had been issued a federal grand jury subpoena on Jan. 17. A spokesman said the university withheld the suit at the request of the U.S. Attorney for the Southern District of New York.

N.C. State released the subpoena to The News & Observer on March 16. The subpoena required N.C. State to turn over any communication between university athletics staff and Smith Jr., his father, Dennis Smith Sr., trainer Shawn Farmer and “any other family member or representative of Smith.”

It also requested personnel files for Gottfried and Early and any communication between N.C. State athletics staff and Gatto, Code, and any other representative of or person with ties to adidas — including Christopher Rivers, Thomas “T.J.” Gassnola and Anthony Coleman.

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Gassnola, a former adidas consultant and the director of a Massachusetts-based AAU basketball team, pleaded guilty to paying high school players’ families to ensure players attended certain colleges and is cooperating with the investigation, Bloomberg News reported after previously sealed court documents appeared on the public docket on April 27.

The second report Yahoo released on Feb. 23 included more federal documents — among them an Aug. 29, 2016, email from Dawkins to ASM agent Andy Miller mentioning Gottfried, Early and Pierre.

Dawkins wrote in the email that Pierre “never called me back but Gottfried and Orlando Early called me over the weekend on separate matters.” The nature of the contact between Dawkins, Gottfried and Early is unclear.

Dawkins copied ASM agent Andrew Vye, office manager Jessica Ruffin, and finance manager Gabriel Ovejas on the email, which also included notes about Bowen, who was being heavily recruited by Gottfried at the time.

“Vye if you have to make a call to these guys the kid that they want from me is Brian Bowen. Joe (Pasternak) is telling me the kids dad wants him in school for 2 years, not sure how true that is,” Dawkins wrote. “My kid isn’t going to decide anytime soon, so I would act quickly and try to make a relationship with the kids dad now. Arizona will pretty much do whatever we ask of them right now, until my kid decides on a school.”

What about Dennis Smith Jr.?

The first Yahoo report included a Dec. 31, 2015, balance sheet from ASM Sports — a sports agency run by NBA agent Miller — that listed Smith Jr. as owing $73,500 in loans he received from the agency. Under the subheading “Loan to Players” Smith is listed as having received a loan for $43,500.

Neither Smith Jr., who was drafted by the Dallas Mavericks last year, nor Smith Sr. were named in the indictment and neither has been charged with a crime. While bribing a college staff member would be considered criminal, a player accepting money would not be — but would violate the NCAA’s amateurism rules.

The superseding indictment says “in or around 2015” Gatto, along with an unnamed co-conspirator (CC-3), conspired to funnel about $40,000 of adidas money to “Parent-1”, who appears to be Smith Sr. based on events described in the document. Smith Jr. declared for the NBA draft after playing his freshman season with the Wolfpack under Mark Gottfried in 2016-17.

The player in the documents, believed to be Smith Jr., began having second thoughts after committing to N.C. State in the fall of 2015, the indictment says, so Gatto agreed to give “Coach-4,” an unnamed N.C. State basketball coach, $40,000 to deliver to the father of the player, believed to be Smith Sr. The coach accepted the money and represented it would be delivered to the father, the indictment states.

On May 9, shoe company Skechers referenced Smith Jr. in a lawsuit accusing adidas of paying players, creating an unfair advantage in the athletic apparel industry.

The allegations said adidas created an appearance that top-caliber basketball players including Smith Jr. chose its products, when in reality the company “coopted young players into wearing and expressly or implicitly endorsing its products by funneling hundreds of thousands of dollars in secret payments to players, their coaches, and/or family members in violation of National Collegiate Athletic Association (“NCAA”) rules.”

Gatto admits funneling the money to Smith’s family, according to his attorney’s Oct. 2 testimony at the start of the trial stemming from the FBI investigation in New York.

Dennis Smith Jr. has denied the allegations.

What has NC State said about this?

On Feb. 23, N.C. State’s response to the initial Yahoo report included information from athletic director Debbie Yow that said the school had disassociated itself from Miller, the NBA agent with ASM Sports, in 2012 because previous NCAA reports showed he had lied about his association with Georgia AAU coach Desmond Eastmond. N.C. State had investigated Eastmond in 2010 related to providing impermissible benefits to Wolfpack athletes.

Yow and N.C. State Chancellor Randy Woodson issued statements on the FBI investigation on April 17.

“If the allegations from the superseding indictment are proven true, any former employees involved knew they were breaking the rules and chose to keep it hidden,” Woodson’s statement said. “We have no tolerance for those who would choose to damage the reputation of this great university.”

Yow added: “When that culture is threatened, we will always act with integrity.”

Will the FBI case lead to NCAA sanctions for NC State? A look at the possibilities.

The university officials also disclosed a timeline of N.C. State’s actions in the investigation, which revealed some new information about the FBI case.

Included was an entry for Oct. 12, 2017, in which Wilmington attorney and registered sports agent Gary Shipman contacted N.C. State’s general counsel to report his belief that Smith Jr.’s enrollment was influenced by adidas through his father.

Shipman, however, said he had no direct evidence to support that claim.

“You had to get within the inner circle, and you had to do things to get within the inner circle that those in the inner circle would expect, and I couldn’t do them,” said Shipman, who is also an attorney. “I wasn’t willing to do what they expected.”

Has Mark Gottfried responded?

Gottfried was fired from N.C. State in February 2017. He was hired by Cal State-Northridge on March 13, 2018, and in a statement school officials indicated there were no “red flags” with the hire.

“Compliance was an important issue for us in the search for our next men’s basketball coach,” the statement said. “The great thing about bringing Mark Gottfried to CSUN is that we had a 20-year track record to review. Coach Gottfried has an excellent compliance record and understands how to build winners the right way. We did our own due diligence and, as both Coach Gottfried and officials at North Carolina State have said, there are no red flags whatsoever.”

That morning, Gottfried told the Los Angeles Times, “I don’t foresee any red flags that I’m aware of. That’s a situation that’s much bigger than all of us. It has affected a lot of programs. But I’m confident ... that should be behind us pretty quickly.”

Officials at Cal State-Northridge have declined a records request from The News & Observer on the due diligence the school did when hiring Gottfried. The school says the records are exempt under California public records laws.

Was UNC involved?

Though not named, UNC commit Nassir Little, based on multiple reports appears to be the person identified as “Player-12” in the original indictments, and referenced again in the superseding indictment.

Little, who played on Augustine’s AAU team in Florida, and his father Harold on Oct. 13 denied under oath FBI allegations that at least one Miami coach was involved in a scheme to bribe Little as a recruit.

Little and his father are not named in either indictment.

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On Oct. 23, Miami coach Jim Larranaga said he appears to be “Coach-3”, the person the federal documents allege requested $150,000 from adidas executives to pay Little to commit to both Miami and the apparel company. But Larranaga, who also wasn’t named in either indictment, said on Oct. 25 that he had never had a recruit ask for money.

Details of an Aug. 12 phone call between Code and Dawkins that are included in the FBI’s original indictment appear to show how Little was caught in a bidding war between Miami, an adidas-sponsored school, and Arizona, a Nike-sponsored school. In the call, Code says if University-4 (believed to be Arizona) is willing to pay the player who appears to be Little, “then that’s where the kid is going to go.”

In a tweet on Oct. 1, Harold Little claimed Miller, Arizona’s head coach, did not offer his son money: “Please stop promoting that false narrative…please!”

Three days later, on Oct. 4, and a little more than a week after the FBI’s original indictments, Nassir Little announced he had committed to UNC.

The April 10 superseding indictment alleges Gatto asked Code to try and negotiate a payment to the family of a Miami target — believed to be Little — in order to match the $100,000 they agreed to pay another player for their commitment to Louisville — believed to be Bowen.

Former UNC basketball players Tony Bradley, Brice Johnson and Brendan Haywood were named in the first Feb. 23 Yahoo report. Johnson was listed in the report on a Dawkins expense report dated February 2016 as a $100.06 “Dinner w/ Brice Johnson/Dion Bathea” on March 1, 2016 at Carrabba’s Italian restaurant.

Haywood is listed on a Dec. 31, 2015, ASM Sports balance sheet under a heading of “Loan to Players” as owing $351.17.

Bradley is mentioned in the Yahoo report as one of the former players or player’s family members meeting with or having a meal with Dawkins, but his named is not on the federal documents included with the report.

Tony Bradley Sr. responded to the Yahoo report by saying he had lunch with ASM Sports reps after his son declared for the draft, and that Bradley Jr. had never met with Dawkins, according to Inside Carolina.

“They didn’t take us to a fancy restaurant,” Bradley Sr. said, according to Inside Carolina. “We went to the office and ordered pizzas. We ate pizzas while they introduced everyone that worked for [Andy Miller]. It wasn’t dinner or anything like that.”

Though he is not named, a government informant called “CW-1” (cooperating witness) in the original indictment appears to be Marty Blazer, a Pittsburgh sports financial adviser and business manager who previously had ties to former UNC football players Chris Hawkins and Greg Little.

Blazer and Hawkins worked together to funnel former UNC football players to preferred agents, according to court documents. They discussed paying UNC players Robert Quinn and Kendric Burney, who were involved in the NCAA’s 2010-11 investigation into impermissible benefits within the UNC football program.

What about Duke?

Former Duke forward Wendell Carter Jr. was also named on the same February 2016 Christian Dawkins expense report as Johnson that was included in the Yahoo reports, but he too was not named in the indictments.

The line listed a $106.36 “Lunch w/ wendell carter mom” at LongHorn Steakhouse dated Feb. 22, 2016.

Krzyzewski, the Duke coach, on Feb. 24 said Kylia Carter, Wendell Carter’s mother, told him she and Carter’s dad had gone to lunch with Dawkins but that Carter’s father didn’t like Dawkins and left. Kylia Carter told Krzyzewski she stayed longer, but that the family never ate or paid for any of the $106.36 lunch bill listed on the expense report.

Carter on April 16 declared for the NBA draft, making him the fourth one-and-done Blue Devil of the season.

Other ties to the Triangle

Louisville leaders fired head coach Rick Pitino on Oct. 16, 2017, unconvinced he didn’t know of alleged schemes within his program, which was already on probation by the NCAA, despite him not being named in the federal complaints, according to multiple reports. Two days later, Louisville parted ways with athletic director Tom Jurich.

The following week, current N.C. State coach Kevin Keatts said he had spoken with Pitino, under whom he served as an assistant at Louisville from 2011-14 and considers a mentor.

“There’s a lot of information that’s not out there that’s yet to come out,” Keatts said. “What I will say is the information that’s been provided, that’s not the same guy that I coached with four years ago.”

Bowen, a five-star Louisville recruit in the Class of 2017 who was heavily recruited by Gottfried and N.C. State, is not named but appears in the documents as “Player-10,” an athlete whose father was to receive $100,000 in four installments in exchange for his commitment to the Cardinals.

The indictment states $25,000 was delivered to the father, and another $25,000 was in the pipeline but not delivered before the defendants were arrested.

Bowen never played a game for Louisville and has since transferred to South Carolina.

A Feb. 23 ESPN report said Arizona coach Sean Miller had an FBI-wiretapped phone conversation with Dawkins, discussing a $100,000 payment to ensure the Wildcats signed freshman Deandre Ayton.

[What former NCSU assistant Archie Miller says about his brother Sean in wake of scandal]

Miller, an assistant to Herb Sendek at N.C. State from 1996-2001, sat out of a Feb. 24 game at Oregon and issued a response to the ESPN report.

“I continue to fully support the university’s efforts to fully investigate this matter and I am confident I will be vindicated,” Miller said in the statement.

6 players in updated indictment

A half-dozen players are mentioned in the superseding indictment – half of them allegedly being Smith Jr., Bowen and Little.

The document says Gatto, Code and Dawkins also planned to funnel $12,700 to family members to influence another, unnamed high school athlete to attend Louisville and retain Dawkins’ services in the NBA, the superseding indictment states.

It also says the schemers conspired to funnel $65,000 of a promised $90,000 to the parent of a top high school player in exchange for a commitment to Kansas and with the expectation the player would sign with adidas as a pro. They also appear to have paid $20,000 to the legal guardian of another top high school player as a first payment toward getting them to commit to Kansas instead of a school sponsored by one of adidas’ rivals, according to the indictment.

News reports have said these two Kansas recruits are former Jayhawk power forward Billy Preston and current Kansas forward Silvio de Sousa.

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On April 25, the College Basketball Commission handed down recommendations for resolving issues within the sport.

Among the propositions were ending the “one-and-done” rule, reinstating freshmen ineligibility, and developing strict standards for certifying sports agents and allowing them to work with high school prospects.

What’s the latest?

Jury selection began Oct. 1 in the government’s cases against Merl Code, Jim Gatto and Christian Dawkins, who faced federal felony charges.

Gatto’s attorney testified on Oct. 2 that the adidas executive admits that he paid the family of Dennis Smith Jr. $40,000 to ensure that he played at N.C. State.

On Oct. 9, N.C. State compliance director Carrie Doyle testified that she had no prior knowledge of a $40,000 payment made to the father of Smith Jr. to secure his son’s commitment to play for the Wolfpack. A memo showed in court the next day revealed concerns Doyle had with Gottfried interacting with Eastmond and agent runner and former N.C. State football player Eric Leak.

Also on Oct. 10, Gassnola testified to making concealed payments to the families of five players, including Smith Jr., on behalf of adidas. The other players he named were Ayton, Bowen, de Sousa and Preston.

On Oct. 11, Gassnola testified that he delivered $40,000 provided by Gatto to Early in 2015, and that Farmer became the “go-between” to get the money to Smith Sr. In response, Gatto’s attorney presented documentation of a wire transfer showing the money came from Martin Fox, one of Andy Miller’s colleagues.

A text message conversation between Dawkins and Augustine presented in court on Oct. 15 appears to support claims the Littles made that they did not accept any money.

Duke freshman Zion Williamson’s name came up in court on Oct. 16, when Code’s attorney attempted to enter into evidence a phone conversation in which Code and Kansas assistant Kurtis Townsend allegedly discuss financial requests by Williamson’s family. The next day, Duke officials said they were “confident Williamson’s eligibility wasn’t compromised,” The N&O reported.

During closing arguments on Oct. 18, Gatto’s attorney Michael Schachter made the case that Pitino and Kansas coach Bill Self were aware players were being paid and that Gatto’s actions were meant to help the adidas-sponsored schools rather than defraud them.

The first of three trials in the case produced a verdict on Wednesday, when the 12-member jury found Gatto, Code and Dawkins guilty on all counts of wire fraud and conspiracy to commit wire fraud.



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