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NC State subpoenaed by Justice Department amid investigation of college basketball

Here’s how the NCAA basketball bribery schemes worked

After two years undercover, the FBI found members of top NCAA basketball programs involved in corrupt bribery schemes. Here's how those schemes worked.
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After two years undercover, the FBI found members of top NCAA basketball programs involved in corrupt bribery schemes. Here's how those schemes worked.

N.C. State received a federal grand jury subpoena from the United States District Court in New York to turn over records on Jan. 17, Fred Demarest, a school basketball spokesman, said Friday.

The school's Office of General Counsel received the request from the Southern District of New York, where a grand jury was empaneled in relation to the FBI's investigation into college basketball last fall. The Washington Post was the first to report the news.

The request, Demarest said, is for records and not to interview current staff members. N.C. State athletic director Debbie Yow did not respond to a request for comment. 

In response to questions from The News and Observer on Feb. 19, N.C. State first-year head basketball coach Kevin Keatts said N.C. State was not part of the FBI's investigation.

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“We are 100 percent not involved in this,” Keatts said at the time. “I don’t have any concerns at all about N.C. State. I have no reason to believe at all that we have anything to do with the FBI or anything else. Obviously I wasn’t here but we don’t have anything on our end from a school standpoint or basketball. We don’t have any red flags or concerns at all.”

Demarest said Friday that the school's Office of General Counsel did not inform the current staff about the subpoena.

"Coach Keatts was not contacted about and did not know of the subpoena when he addressed the issue in February," Demarest said.

When asked about the nature of the Department of Justice's inquiry, Demarest said he was unable to expand any further than he already had.

On Sept. 27, 2017, 10 people, including four college basketball coaches, were arrested as part of the FBI’s investigation into two pay-to-play schemes involving agents, recruits and college basketball coaches.

Two days later, on Sept. 29, 2017, Demarest told The News & Observer there had been no contact between anyone at N.C. State with federal investigators or the NCAA.

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On Oct. 17, 2017, N.C State said it had conducted an internal review of its compliance operations. Demarest at the time said no changes were made and that Carrie Doyle, who heads the school’s compliance staff, regularly meets with the staff of the basketball program.

On Feb. 16, a Yahoo Sports report stated that half of the teams in the top 16 released by the NCAA tournament selection committee for this year's tournament “should be scared” about the FBI’s next move in the probe.

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A week later, on Feb. 23, Yahoo Sports released another report. This one included federal documents, obtained as part of the FBI’s investigation, that alleged former N.C. State basketball star Dennis Smith Jr. owed $73,500 in loans he received from ASM, a sports agency owned by Andy Miller, a former NBA agent who had been disassociated from N.C. State since 2012 and was involved in the FBI's investigation into corruption in college basketball.

A Dec. 31, 2015 balance sheet included in the Yahoo report notes that Smith had received a loan for $43,500. Smith, who attended Trinity Christian in Fayetteville, was still in high school at the time.

Smith played at N.C. State under Gottfried in the 2016-17 season before declaring for the NBA draft.

The federal documents in the Yahoo report had notes on how the money loaned to Smith could be recouped if Smith went with another agent, according to the Yahoo report. The money Smith reportedly received is the highest total listed in the wide-ranging Yahoo story.

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Smith ultimately hired Glenn Schwartzman of Paramount Sports and Entertainment as his agent, not ASM. He was the ninth pick in the 2017 NBA draft, going to the Dallas Mavericks.

In response to the Yahoo report, Yow, the N.C. State athletic director, said in a statement: "We learned of the report this morning and it is the first we've heard about this information. The report involves an agent NC State disassociated with in 2012 (see attached letter). Of course, we will fully cooperate with any investigations or inquiries."

The disassociated agent Yow was referring to was Miller, the ASM owner and NBA agent.

A second Yahoo Sports report, released later in the day on Feb. 23, included federal documents that said former N.C. State head coach Mark Gottfried, and former N.C. State assistant coach Orlando Early were in contact with Christian Dawkins, a former AAU basketball coach who was an associate of Miller's at ASM and one of the 10 people arrested in the FBI's probe in September.

Dawkins, though he worked for Miller from 2015-17, was not disassociated from N.C. State.

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Included in the federal documents in the second Yahoo report is an Aug. 26, 2016 email from Dawkins to Miller about Gottfried, Early and another former N.C. State assistant coach, Butch Pierre.

Copied on the email were Andrew Vye, an ASM agent, Jessica Ruffin, an ASM office manager, and Gabriel Ovejas, an ASM finance manager.

In the 9:52 a.m. email, which had the subject line "Morning Update," Dawkins wrote that Pierre, “never called me back but Gottfried and Orlando Early called me over the weekend on separate matters.”

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The email also includes notes about Brian Bowen, a Class of 2017 forward who was heavily recruited by Gottfried.

“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 in the Aug. 26, 2016 email. “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.”

Bowen committed to Louisville in June 2017 after an agreement was allegedly made for adidas to pay his family $100,000, according to FBI documents released in September. Bowen was not named in the FBI's report. Bowen never played a game at Louisville and transferred to South Carolina in January.

Louisville coach Rick Pitino and athletic director Tom Jurich were both fired as a result of the Bowen scandal.

Gottfried was fired in February 2017, and Gottfried, Early and Pierre left N.C. State in March 2017.

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On Oct. 20, 2017, The News & Observer requested from N.C. State any electronic communication between N.C. State employees, athletic department staff and N.C. State board of trustees members and the NCAA that mentions Smith and the federal investigation into payoffs to players and college coaches and assistants.

On Nov. 7, 2017, N.C. State responded: “Any emails, correspondence, or records pertaining to a student during their enrollment at NC State is protected under FERPA. Current or former students. This includes records or correspondence involving parents.”

The response went on to say: “We have not been part of a federal investigation involving payoffs and college coaches or assistants.”

N.C. State is the eighth school publicly involved in the ongoing FBI investigation. Assistant coaches at Auburn, Southern California, Arizona and Oklahoma State were all accused of taking bribes as part of a scheme to direct players to certain colleges. One of those coaches previously worked at South Carolina, which also received a grand jury subpoena.

Louisville and Miami were mentioned in FBI documents as having coaches who were involved in providing bribes to players and their families.

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NC State guard Torin Dorn is prevented from answering any questions about former teammate Dennis Smith Jr. by basketball SID Craig Hammel during a media gathering on Friday, Feb. 23, 2018.

NC State basketball coach Kevin Keatts addressed a report by Yahoo! Sports on Feb. 23, 2018 that former Wolfpack player Dennis Smith Jr is alleged to have received money from a company run by former NBA agent Andy Miller.

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