The FBI on Tuesday announced the filing of a superseding indictment in its college basketball investigation that expands the scope of the charged wire fraud conspiracy and alleged payments to include additional families of student athletes, including an athlete at N.C. State that appears to be Dennis Smith Jr., who left for the NBA last summer after his freshman year.
Sports agent Christian Dawkins and former adidas employees Merl Code and James Gatto, all arrested last September and indicted last November in the government’s original charges in the case, are named in the superseding indictment released on Tuesday in connection with their involvement with players recruited by N.C. State, Kansas, Miami and Louisville.
Neither Smith and his family nor any N.C. State coaches were indicted Tuesday.
Documents released on Tuesday don’t name any N.C. State players or coaches. But details in them make it clear the player involved is Dennis Smith Jr., who played for the Wolfpack in the 2016-17 season before entering the NBA Draft. He currently plays for the Dallas Mavericks.
According to the FBI investigation, Gatto conspired to funnel $40,000 to Smith’s father to secure Smith’s commitment to N.C. State. The FBI pointed out that N.C. State was under contract with adidas at the time.
The indictment points out that Smith committed to N.C. State in September 2015 only to begin having second thoughts. At that time, Gatto agreed to funnel $40,000 through a N.C. State coach, who is not named in the indictment, to Smith’s father.
The coaches who recruited and coached Smith at N.C. State, including head coach Mark Gottfried, were fired in March 2017.
Attempts to reach Gottfried, who was hired by Cal State-Northridge as its head basketball coach last month, and former N.C. State assistant coach Orlando Early for comment were unsuccessful on Tuesday. Smith, who was in Dallas with the Mavericks, was not immediately available to answer questions.
The FBI investigation said the $40,000 was withdrawn from an account that an unnamed co-conspirator controlled and was delivered to the N.C. State coach in North Carolina. The coach told the co-conspirator the money had been subsequently paid to Smith’s father. Gatto then submitted sham invoices to adidas so he could reimburse the co-conspirator the $40,000.
In December, Smith signed a financial aid agreement with N.C. State and enrolled in school for the spring semester, beginning in January 2016. Upon signing with N.C. State, according to the indictment, Smith was asked whether he or anyone in his family had been paid money, borrowed money or received any benefit of any kind from an athletics booster, sports agent, runner or financial adviser within the past year. Smith Jr. answered no to the question.
The indictment alleges that Gatto, Smith’s father and the unnamed coach made false statements to the NCAA and to N.C. State regarding Smith Jr.’s eligibility.
N.C. State athletics department spokesman Fred Demarest released a statement Tuesday night acknowledging the new indictment.
In it, he said the school contacted Gottfried and his former assistant coaches about the FBI's allegations last year.
"NC State’s Office of General Counsel and Athletics’ Compliance staff contacted former basketball coaches asking whether they had any knowledge of or involvement in any activity related to the allegations coming from the U.S. Attorney’s Office," Demarest said in the statement. "Former staff questioned stated they had neither any knowledge nor involvement.."
The statement also said "NC State will continue to fully cooperate with the U.S. Attorney’s Office and keep the NCAA updated throughout this investigation."
On Jan. 17, N.C. State received a subpoena asking for records pertaining to Smith's recruitment. The U.S. attorney asked for:
-- Any communications between any member of the NC State Athletics Department, including the basketball coaching staff, and Smith; his father, Dennis Smith; trainer Shawn Farmer; and "any other family member or representative of Smith."
-- Any communications regarding Smith, his family or representatives.
-- Documents associated with Smith's enrollment, financial aid and athlete eligibility, including any drafts.
-- All communications between any member of the athletics department and Gatto, Christopher Rivers, Thomas "T.J." Gassnola, Anthony Coleman, Code and "any other representative of adidas." News reports list Rivers, Gassnola and Coleman as having ties to the apparel company. Coleman is reportedly an assistant coach with the Arizona State basketball team.
-- Personnel files for Gottfried and Early, his assistant coach who handled recruiting for the basketball program, including employment contracts and documents reflecting "terms of compensation."
-- Any forms signed by Early regarding student-athlete eligibility and any representations made by Early regarding student-athlete eligibility.
In February, Yahoo! reported that Smith received $73,500 in loans from Dawkins, an associate of prominent agent Andy Miller. The reported included a 2016 email between Dawkins and Miller referring to phone conversations with Gottfried and two assistant coaches.
Miller, Dawkins' former boss at the sports agency ASM, has not been arrested but received a disassociation letter from N.C. State in 2012. He is no longer certified by the NBA to represent NBA players.