NEW YORK (Reuters) - U.S. authorities on Tuesday unveiled fraud charges against 10 people associated with some of the country’s premier college basketball programs, including four coaches and an Adidas AG (ADSGn.DE) executive, following a two-year corruption probe.
Prosecutors said they uncovered two related schemes, including one in which apparel executives, financial advisers and others bribed assistant college coaches to steer elite players to them, and a second in which players were allegedly bribed to enroll at schools sponsored by Adidas.
The charges reflect what prosecutors called the “criminal influence of money” on National Collegiate Athletic Association basketball, and the conflicts that could arise from the drive to win and the need to provide student-athletes an education.
“College sports has a history of corruption, but the involvement of coaches is particularly troubling,” said Mark Conrad, a sports law and ethics professor at Fordham University’s Gabelli School of Business. “It raises questions about the priorities of the so-called ‘power’ schools.”
Among those charged was Chuck Person, a former National Basketball Association star who became associate head coach at Auburn University, his alma mater.
The other coaches charged are Anthony “Tony” Bland, from the University of Southern California; Lamont Evans, from Oklahoma State University and formerly the University of South Carolina; and Emanuel “Book” Richardson, from the University of Arizona.
“We have no tolerance whatsoever for this alleged behaviour,” NCAA President Mark Emmert said in a statement. “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.”
Person, Evans and Richardson were suspended by their respective universities, while USC said it put Bland on leave and hired former FBI Director Louis Freeh to conduct an internal probe.
Among those also charged were James Gatto, director for global sports marketing for basketball at Adidas; Rashan Michel, who runs an Atlanta apparel company; New Jersey money manager Munish Sood; and Christian Dawkins, a former ASM Sports agent who prosecutors said was fired in May.
Prosecutors said Gatto and others funnelled $100,000 from Adidas, identified as “Company-1,” to the family of an elite high school prospect so he would play at an Adidas-sponsored school matching the description of the University of Louisville.
The player was also expected to sign with Adidas upon turning professional, prosecutors said.
Joon Kim, the acting U.S. attorney in Manhattan, told a press conference the defendants showed “contempt” for players and coaches who follow the rules.
Adidas said in an email it was “unaware of any misconduct and would fully cooperate with authorities to understand more.”
Jeff Duffey, a lawyer for Person, declined to comment. The firm matching the description in court papers of Sood’s firm had no immediate comment. Other defendants’ lawyers declined to comment or could not be identified.
Person, 53, was a two-time All-American at Auburn and became its all-time scoring leader. He later played for the Indiana Pacers and other teams in a 13-year NBA career.
Prosecutors said Person accepted $91,500 of bribes over 10 months from a financial adviser, who was secretly cooperating with prosecutors, in exchange for steering NBA-worthy Auburn players to hire the adviser and buy suits from Michel.
They said Person also claimed to pay $18,500 of that sum to two players’ families.
Court papers describe a secretly recorded meeting at a Manhattan hotel last December where Person told an Auburn player that he knew some of his help was “a violation ... of rules, but this is how the NBA players get it done, they get early relationships, and they form partnerships, they form trust.”
Auburn President Steven Leath said on Twitter the school was “saddened, angry and disappointed” by the news.
“We are committed to playing by the rules, and that’s what we expect from our coaches,” he said.
Louisville’s interim president, Gregory Postel, USC Athletic Director Lynn Swann, Arizona and South Carolina said their respective schools would cooperate with authorities.
Paul Haagen, co-director of Duke University’s Center for Sports Law and Policy, said the charges reflect pressure on coaches to recruit players, and on apparel companies to sign up future stars like Michael Jordan, the NBA Hall of Famer long associated with Nike Inc (NKE.N).
“Everyone wants to be making money,” Haagen said. “The main significance is whether this probe involves just these charges, or turns into a much bigger investigation. It has the indicia of being much larger.”
Reporting By Brendan Pierson and Jonathan Stempel in New York; Editing by Dan Grebler and Richard Chang