NC State

How a Wilmington sports agent factored into the probe of NC State and Dennis Smith Jr.

Sports agent Gary Shipman of Wilmington had been representing football players seeking to go pro for several years when he decided he'd try to crack the NBA market. He wanted to land an athlete likely to be a lottery pick, and there was one just up the road in Fayetteville -- Dennis Smith Jr.

At that point, Smith was a rising senior at Trinity Christian, and the buzz around the point guard was red hot.

Shipman said a friend of his who is a veteran of the college basketball recruiting scene told him he should just stick to football. Basketball was too dirty, the veteran told him.

Shipman said he tried anyway, and his efforts convinced him the recruiting world was just as his friend had said, leading him to contact N.C. State University three weeks after the FBI's probe into college basketball erupted with criminal charges on Sept. 26. Among those arrested in the investigation were four college basketball coaches, and representatives of adidas and sports agencies. That investigation is digging into an underworld of payoffs involving sneaker companies, sports agents, financial advisers and college basketball coaches and recruits.

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It touched down on N.C. State on Jan. 17, when a federal grand jury subpoenaed the school for documents related to Smith's recruitment, and intensified when an April 10 superseding indictment charged that an adidas representative, Jim Gatto, had agreed to give an unidentified N.C. State basketball coach $40,000 to give to the father of a player, believed to be Dennis Smith Sr., as a way to convince his son to go to N.C. State, an adidas school. According to the indictment, an unidentified adidas consultant then delivered the money to the N.C. State coach.

Dennis Smith Jr. and Dennis Smith Sr. are not named in the FBI's indictment. Smith Jr. was heavily recruited by former N.C. State coach Mark Gottfried and former assistant coach Orlando Early.

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Shipman's contact with N.C. State became public Tuesday, when the university released an Oct. 30, 2017, letter recounting his interactions that month with N.C. State's attorneys and athletics compliance staff. But Shipman said in an interview with The News & Observer on Tuesday he had no direct evidence of money being paid to Smith and had not talked with the star guard or his father. He has not talked to the FBI, despite the fact that NCSU alerted the FBI to his coming forward.

"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."

But Shipman wasn't willing to say who told him what was expected, other than to say much of it came from the unidentified friend who moved in AAU circles, wasn't in Smith's inner circle and wasn't looking to profit. That friend, Shipman said, told him adidas and Nike were in a bidding war with Smith's father, and that Shipman would have to offer money to have an opportunity to pitch his services.

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Shipman said he came forward after Paul Pogge, an associate athletic director at UNC-Chapel Hill, showed him state legislation intended to reform agent activity. The legislation would require agents to report violations. It stems in part from a football scandal at UNC in 2010 in which agents and their associates were caught offering money and other perks.

A timeline of N.C. State's involvement with the FBI investigation released Tuesday by the university states that an agent (Shipman) contacted the university on Oct. 12. A week later, on Oct. 19, Shipman told General Counsel Eileen Goldgeier that he believed Smith Jr.'s enrollment was "due to influence by Adidas through his father, Dennis Smith Sr.," a university statement said.

That led to a face-to-face interview on Oct. 25 between Shipman and Carrie Doyle, NCSU's senior associate athletics director for NCAA compliance.

"Being a registered agent in NC, you informed us that you wanted to learn how to represent a lottery pick and sought to be taken under the wing by an unnamed person with experience in the basketball recruiting and agent representation processes," Doyle wrote in the Oct. 30 letter to Shipman. "In the course of that experience, you believe that Mr. Dennis Smith, Sr. was involved in a bidding war with Nike and Adidas for his son to attend college. You further stated that you believe that Mr. Smith, Sr. was paid by Adidas, which influenced his son to attend NC State."

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The letter goes on to say that Shipman stated he had "no personal knowledge and did not observe any payment[s] of any kind." Nor did he know of any current or former N.C. State employee or athlete who was involved or knew about any payment, or that whether Smith Jr. knew about any possible payment to his father.

The letter notes that Shipman declined to provide any names of people who could help NCSU figure out what had happened, but that he had offered to "reveal more information to the FBI."

The letter has been provided to a federal grand jury under the subpoena, and it was provided to The News & Observer as part of a public records request.

Shipman said the letter accurately conveyed his information, though he said he also told them it's highly likely someone on NCSU's athletic staff at the time of Smith's recruitment would know if Smith or his father had taken money. He said the FBI hasn't reached out to him, though that doesn't surprise him.

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"There is nothing that I know or believe that they don't know," he said.

Shipman said what he did see as he sought to recruit Smith was representatives from all three sneaker companies hovering around top players and their families at AAU events. (Smith had suffered a knee injury and wasn't competing during that time, Shipman said.) The sneaker companies all sponsor AAU teams. The one Smith played for in high school, Team Loaded, was an adidas sponsored team, and his father was a coach.

It's not against NCAA rules for sneaker companies to pay to sponsor AAU teams, which travel extensively and appear to have the upper hand in showcasing high school athletes to colleges. When the athletes' parents are employed by the teams, it raises the question of whether the companies and families are circumventing the NCAA's eligibility rules.

The NCAA does not allow basketball and football players to profit off of their sport. Their payment for their athletic endeavors is supposed to be a free college education.

Critics say this amateurism model has created a black market for sneaker companies, sports agents and others looking to make money off of top talent. The NBA won't allow players to be drafted until they are a year out of high school, and the NFL requires football players to wait three years. That pushes many athletes to go to college, whether they have the aptitude, desire or financial security to pursue an education.

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Shipman, who played high school football at Millbrook and grew up in Raleigh, according to the Wilmington Biz website, said he got another taste of that black market in late 2016, when he said a man called his office claiming to be the uncle of a top college basketball player who wasn't from North Carolina and wasn't playing for an in-state school. The uncle told him that he'd provide access if Shipman provided the uncle with a vehicle. Shipman said he turned him down.

"That was the only time that I was directly solicited," Shipman said. "But by that point in time I had already realized that is how the game is being played."

Shipman grew up a Carolina fan, though he graduated from UNC-Wilmington and later served as a board trustee. He said he has represented roughly 20 football players over the past eight years, many of them with UNC. More recently he's signed UNC running back T.J. Logan and Duke defensive lineman Mike Ramsay.

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Shipman is also running for a state House seat, and made headlines recently by saying he's "a member of the African American community." Shipman is white, and said he's not claiming to be black, but has worked for the community as an attorney and Democratic party official.

He said the FBI's investigation has convinced him that many top basketball recruits are likely being offered money in some way to pick what school they'll go to, making it difficult for those who play by the rules to compete.

"What I hope will come from this is a level playing field," Shipman said.