Top Adidas Marketer Charged With Multiple Counts of Fraud in Alleged College Basketball Bribery Scheme

10 executives, coaches and advisers were arrested today

A marketing executive for Adidas has been found guilty of fraud in a scheme involving top high school basketball players. Twitter: @adidashoops
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The U.S. Department of Justice today charged four assistant college basketball coaches, two Adidas marketing executives, a clothing company founder and three athletic advisers, alleging a web of illegal activity among top-tier schools with Adidas sponsorships.

The Justice Department claims that Adidas director of global sports marketing James “Jim” Gatto, along with another Adidas employee, Merl Code, and several other people paid bribes to high school basketball players and their families.

The four NCAA assistant coaches named in the indictment include Auburn University’s Chuck Connors Person, Lamont Evans of Oklahoma State University, Emanuel Richardson of University of Arizona and Anthony Bland of the University of Southern California.

According to a document released today and authored by the FBI agent who conducted the investigation, the understanding was that the students would attend schools sponsored by Adidas on scholarships and then sign contracts with the company when they went professional. They would also agree to retain the services of sports manager Christian Dawkins and financial adviser Munish Sood. Jonathan Brad Augustine, president of student athlete nonprofit The League Initiative, and Rashan Michel, founder of a formal clothing company based in Atlanta, were also arrested.

In the complaint, Michel is identified as an “athlete adviser,” while Augustine and Code were both called “individuals affiliated with Company-1,” or Adidas.

Gatto, Code, Dawkins and Sood allegedly worked to funnel money totaling in the low six figures from the NCAA Division I schools in question to at least three players.

According to the complaint, the scheme would allegedly defraud the universities by rendering them ineligible to participate in Division I basketball in addition to requiring players and coaches to lie about whether they or the schools employing them had knowingly violated any league rules.

The document goes on to claim that Gatto and Code created “a sham purchase order and invoice” used to justify Adidas’ expenditures since it could not lawfully pay the players or their families.

The charges include bribery, solicitation of bribes, wire fraud conspiracy, honest services fraud and conspiracy to commit wire fraud, among others. Some of the 10 people charged face potential sentences of up to 200 years.

Adidas and many of its competitors like Nike (which also employed Code) have longstanding relationships with the NCAA and certain specific schools.

“Today, we became aware that federal investigators arrested an Adidas employee,” wrote a company spokesperson. “We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

The spokesperson did not respond to a question regarding Code’s status as an Adidas employee working under Gatto.

“The picture of college basketball painted by the charges is not a pretty one—coaches at some of the nation’s top programs taking cash bribes, managers and advisors circling blue-chip prospects like coyotes, and employees of a global sportswear company funneling cash to families of high school recruits,” said Manhattan U.S. Attorney Joon H. Kim in a statement. “For the 10 charged men, the madness of college basketball went well beyond the Big Dance in March.”

Adidas U.S. shares fell 2.6 percent on the news as of the time this story was published.

The Justice Department’s entire 29-page complaint can be read here.

@PatrickCoffee Patrick Coffee is a senior editor for Adweek.