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  • If the bribery and fraud cases lead to convictions, not only would the defendants each face potentially decades in federal prison but the system of college sports could face a kind of scrutiny that it has never before encountered.
By Michael McCann
September 26, 2017

The NCAA has faced significant legal challenges in recent years over its system of “amateurism," which, broadly defined, refers to rules that attempt to define college athletes as not professional. Amateurism prohibits college athletes from receiving gifts upon threat of athletes losing scholarships and schools facing various sanctions. Amateurism has drawn sharp rebuke from those who see a contradiction between the treatment of college athletes as unpaid labor and the very different approach to college coaches, apparel companies and others who profit considerably.

Highlighted by Ed O'Bannon's recent court victory in his case over the unlicensed use of players' names, images and likenesses, these legal challenges have led to improved benefits for NCAA athletes. 

Yet amateurism lives on. And the NCAA and its member schools and conferences continue to generate massive revenue.

For now, at least.

On Tuesday, amateurism entered the crosshairs of multiple federal prosecutions. Ten individuals with deep ties to “big time" college sports have been arrested in three related cases that could rock the foundations of college sports.

First, the Justice Department and FBI revealed an 11-count bribery and fraud complaint in the U.S. District Court for the Southern District of New York. The complaint contains claims against three college basketball coaches, Oklahoma State assistant Lamont Evans, Emanuel "Book" Richardson of Arizona and USC assistant Tony Bland. Christian Dawkins, a sports management executive, and Munish Sood, a registered investment advisor, are named as the fourth and fifth co-defendants in the case.

Meanwhile, Adidas director of global marketing James Gatto, basketball organizer Merl Code and AAU basketball organizer Jonathan Augustine are charged in a related case involving substantial cash payments to families of high school basketball players. Those payments were designed to convince the players to attend particular universities and favor certain apparel companies. Media reports indicate one such player is Brian Bowen, a Louisville recruit. Dawkins and Sood are also named co-defendants in the Gatto case. Complicating things further, Auburn University associate head coach and former NBA rookie of the year Chuck Person and clothing executive Rashan Michel are separately charged for allegedly plotting to direct college players to use Michel's clothing service.

Among other theories of criminal conduct, the Justice Department contends that Dawkins and Sood repeatedly bribed coaches to induce players to hire Dawkins and Sood as investment advisors once those players entered the NBA. Indeed, prosecutors detail numerous incidents of payoffs. They also highlight the substantial roles of an unnamed “cooperating witness" and undercover agents in acquiring the necessary evidence.

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In one recorded meeting, Dawkins allegedly says, “agents obvious have influence, but you gotta get the college coaches too . . . it's almost like skipping a step if you just deal with agents." Dawkins also suggested that he and his co-conspirators ought to exploit the naïveté of college athletes, whom Dawkins surmised, “try to place their trust in people." In response, Sood noted, “in this business all you have is trust."

Collectively, the three complaints read almost like three chapters in a short story on corruption in contemporary American college sports. The narrative covers well-travelled terrain, with college coaches, AAU organizers, shoe executives and financial “advisors" all linked in plots to induce young basketball stars into breaking rules and partaking in impermissible acts. This type of corruption has been known to those in the industry for many years and discussed at length by media. Yet now it serves as the narrative for far-reaching federal prosecutions. Those prosecutions are the game-changer.

If these cases lead to convictions, not only would the defendants each face potentially decades in federal prison but the system of college sports could face a kind of scrutiny that it has never before encountered.

The charges

The three cases follow a multi-year investigation by FBI special agent John Vourderis and other federal officials into the criminal influence of money on college coaches and players who participate in NCAA basketball. The investigation revealed “numerous instances" of bribes made by financial advisors and persons connected to apparel companies to assistant coaches, college players, high school players and various family members. The bribes had simple purposes: convince, either directly or indirectly, future college basketball stars to sign with a particular college or convince future NBA players to hire a bribing financial advisor at the start of those players' NBA careers. 

The federal government's stake in this topic is multi-faceted. For one, the alleged bribes took place across state lines, meaning the persons travelled to different states or communicated across state lines. Such “interstate" activity triggered the possibility of federal charges for conspiracy, bribery, fraud and other crimes. 

In addition, the federal government financially supports both public and private universities, including through financial student aid, grants and tax breaks. From that lens, coaches handle federal resources and those coaches' salaries are partly subsidized through the federal government. Further, these coaches, as one of the complaints details, “have the ability to provide sports agents, financial advisors, business managers and others with access to the student-athletes they coach" and wield “enormous influence over the student-athletes who play for them, in particular with respect to guiding those student-athletes through the process of selecting agents and other advisors when they prepare to leave college and enter the NBA." In at least an indirect sense, then, federal taxpayers are funding corruption in college sports.

With that background in mind, the Justice Department charges that the coaches and financial advisors conspired to commit bribery through educational programs that receive federal funds. Here, the relevant programs are college basketball programs or, more generally, college athletic departments.

Under federal law, a person associated with such a program faces up to 10 years in prison if convicted of agreeing to accept anything of value from any person, “intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more." Since the Justice Department contends the coaches partook in this kind of theft through a conspiracy, they each face an additional maximum of five years in prison. 

The Justice Department incorporates other charges that relate to this underlying theory of criminal conduct. They include “honest services wire fraud" which refers to using wire communication (such as phone communications) in interstate commerce to engage in fraudulent acts. Part of the fraud, according to one of the complaints, involved depriving the coaches' employing universities “of their intangible right to their employees' honest services." This charge carries up to a 20-year prison sentence, plus an additional five years in prison for partaking in a conspiracy.

Travel Act conspiracy also serves as a basis for charges. Under federal law it is a crime to travel in interstate commerce, or use the mail or any facility in interstate, with the intent to distribute the proceeds of any unlawful activity or “promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity." Here the defendants are accused of using the U.S. postal system to further their system of bribes. Violation of this law carries up to a five-year prison sentence.

For their part, Gatto, Code and Augustine are accused of conspiring with Dawkins and Sood to commit wire fraud in a scheme to defraud high school athletes and their families. Through this supposed scheme, the defendants allegedly “concealed bribe payments to high school student-athletes and/or their families" in exchange for matriculating to particular universities. By accepting those bribes, the Justice Department observes, the players became ineligible to compete in the NCAA. These five defendants are also accused of money laundering, meaning using unlawful means to give ill-gotten gains the appearance of being legitimate money. Money laundering carries a maximum prison sentence of 20 years in prison.

Meanwhile, Person and Michel are accused of conspiring to “steer" college athletes to use Michel's clothing service. Person, as an employee of a school receiving federal funds, is accused of accepting bribes as part of a plot to direct players to Michel. Such conduct, prosecutors charge, deprived Auburn of its “intangible" right to Person's services.

If convicted on all counts, the defendants, excluding Dawkins and Sood, could face maximum sentences ranging from 50 to 80 years in prison. Unfortunately for Dawkins and Sood, they face charges in two cases. If convicted across the board and sentenced to the max, each would receive more than 100 years in prison.

Seldom, however, is the maximum sentence imposed when the defendants—as in these cases—lack a substantial criminal record. In addition, a judge can dramatically alter the length of a prison sentence based on whether the judge runs the sentences “consecutively" (one after the other) or “concurrently" (at the same time). It is also possible that the defendants will work out plea deals with the Justice Department where they plead guilty or no contest to lesser charges. Nonetheless, the defendants in these case are threatened with multi-year prison sentences should they be convicted.

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The defenses

A criminal case involving a high-profile defendant or a newsworthy subject often seems most convincing when it first becomes public. This is because the media has only heard from prosecutors, who naturally depict the purported facts and allegations to appear airtight. 

In the coming weeks and months, attorneys for the defendants will likely offer rebuttals to the allegations. There are a number of defenses to these kinds of charges. The most obvious defense is, “it didn't happen." If, however, there are—as the complaints contend—numerous audio and visual recordings, emails, financial and travel records and corroborating statements by witnesses, it would prove very challenging for the defendants to assert that the government's narrative is fundamentally untrue.

With that in mind, the attorneys will likely claim that the government will be unable to prove “intent." Intent is a key element in these charges. The prosecution must prove, beyond a reasonable doubt, that not only the events depicted in the complaint occurred but that the defendants acted to further the purpose of their conspiracy and criminal act. 

Along those lines, the defendants might argue that their conduct merely constituted “business as usual" behavior in 21st Century American college sports. It is no secret bribes have taken place in big-time college sports for years—decades, really. The defendants could assert they could not have “intended" to commit a crime if they engaged in commonplace conduct that, while technically in violation of NCAA rules, often goes without detection. The fact that this type of conduct normally goes undetected isn't all that surprising: in most cases, a college coach and college player obtain money or gifts from a would-be advisor or agent, and, after turning pro, the player hires that advisor or agent. Everyone is happy. It is rare that a Reggie Bush situation occurs where the player doesn't hire the would-be agent who provided the gifts and legal fallout follows. Here, the government investigated, found a cooperating witness with key access and convinced that person to share everything.

Along those lines, expect the defense attorneys to portray any cooperating witnesses as untruthful and unreliable. Such witnesses are from the same turf, if you will, as those who have been charged. To that end, defense attorneys will assert that cooperating witnesses are throwing others under the bus to save themselves. Further, expect to hear that cooperating witnesses have an incentive to exaggerate in order to seem more useful to prosecutors.

Defense attorneys might also object to the admissibility of certain kinds of evidence. It appears the government used recordings of individuals to build the case. Sometimes defense attorneys can raise questions about whether those recordings were conducted in accordance with state laws and pursuant to necessary warrants.

One key decision for the co-defendants and their attorneys will be whether to try to cut a deal early with prosecutors. Prosecutors sometimes offer limited time plea deals to co-defendants. In such a deal, a co-defendant is offered a chance to plead guilty and secure a promise from the prosecutor that he or she will recommend a light punishment to the sentencing judge. In exchange, the co-defendant agrees to turn over all evidence and testify against his co-defendants.

Therein lies the “prisoner's dilemma": if none of the co-defendants takes the government's deal, the government will be less likely to convict all of them, but each co-defendant worries that another will take the deal. In turn, this worry makes each co-defendant more likely to cut a deal.

Damaging impact on the NCAA and schools that employ the defendant coaches and Adidas

While the NCAA is not a party in these prosecutions, its system of college sports is certainly at the heart of them. The complaints repeatedly refer to the NCAA itself and “relevant" NCAA rules. It is from the NCAA's system of amateurism that the criminal investigation became possible: law enforcement became aware various persons broke NCAA rules in ways that violated criminal law. If the NCAA had adopted a system where players were compensated for their labor and compensated for the use of their name, image and likeness, perhaps all or some of these “under the table" payments would not have occurred. We'll never know. But some will ask.

Along those lines, the fact that such extensive corruption allegedly occurred raises questions as to whether the NCAA is even capable of stopping any of it. The NCAA, like any organization, has a limited bandwidth. Further, since it is a private actor, the NCAA lacks subpoena powers and other investigatory capabilities enjoyed by law enforcement.

The individual schools implicated in the prosecutions—including Auburn, Oklahoma State, Arizona, USC and Louisville—are also impacted by the trajectory of these cases. Employees of their schools are now accused of partaking in conduct that violates criminal law and NCAA rules. It stands to reason the NCAA could, and no doubt will, investigate the criminal cases and potentially impose sanctions on those schools.

The schools might also worry about civil liability associated with criminal acts committed by employees, as well as repercussions with their insurance companies. It stands to reason that a recruited player who loses his NCAA eligibility as a result of this criminal investigation could consider suing the recruiting school as well as others involved.

Adidas is also impacted. One of its well-known executives, Gatto, is now a defendant in a criminal case in which he is accused of peddling his position with the apparel company to advance a criminal enterprise. Even if other sneaker company executives partake in similar kinds of misconduct, Adidas is the one with an executive who faces charges. That dynamic could damage the brand and the confidence placed in it by company investors. Also, given that Adidas is a publicly traded company, allegations against an Adidas executive might attract the unwanted attention of the U.S. Securities and Exchange Commission.

All of these associated parties would likely be pleased if the defendants strike plea deals to end the cases as soon as possible. The NCAA, universities and Adidas all know the longer these cases drag out, the more likely compromising evidence will surface, whether that occurs through subpoenas, warrants or the pretrial discovery process. It's possible many names, including of significant figures in college sports, will come to light and in unflattering ways. To that end, it seems quite possible head coaches and athletic department officials of implicated schools may have been aware of an assistant coach’s wrongdoing. Further, executives at the related universities and Adidas could all be called to testify in forums that damage their associated brands.

Role of the NBA and NBPA

As a final point, some of the unnamed players who are mentioned in the complaints presumably now play in the NBA. Their names could surface at some point in the litigation, particularly if called to testify during trials. To the extent these players were deceived by their coaches, it stands to reason that the league and players' association may want to revisit the role of investment advisors who seek to represent NBA players.

Michael McCann is SI’s legal analyst. He is also an attorney and the Associate Dean for Academic Affairs at the University of New Hampshire School of Law, and co-author with Ed O'Bannon of the forthcoming book Court Justice: The Inside Story of My Battle Against the NCAA and My Life in Basketball.

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