- How could the defendants in college basketball's federal trial have defrauded the universities in question if Christian Dawkins, Merl Code and Jim Gatto set out to aid those schools' college basketball programs?
NEW YORK — If it were ever possible to isolate a three-sentence statement that both illustrates the alleged conspiracy at the heart of the ongoing college basketball corruption case and highlights the level of interpretation required of the jury in its eventual ruling, the prosecution provided it in Wednesday’s closing arguments. The statement was in a recording made of Merl Code, a former Adidas consultant and one of three defendants on trial—along with Adidas executive Jim Gatto and aspiring player agent Christian Dawkins—for wire fraud charges. In the recording Code is explaining the “shoe wars” in which Adidas is endlessly battling its sportswear competitors and how payments to basketball prospects help them wage it.
When good players are paid to play in Adidas-sponsored youth programs, Code says, “I win at the grassroots level.” When they are steered to Adidas-sponsored college programs, he says, “My colleges win.” And if the players then turn pro and sign endorsement deals with Adidas, the company wins too.
It’s that middle statement—“my colleges win”—on which so much of the criminal case hinges. The government’s case is built on the idea that the universities involved, by way of being deceived regarding the NCAA eligibility of players that the schools awarded athletic scholarships, were defrauded by a conspiracy involving Code, Dawkins, and Gatto to pay those players in order to attend Adidas-affiliated schools.
The defense would contend that such a statement shows that the defendants’ intent (which is key to their potential guilt) was not to harm the universities, but to help them. The prosecution would contend that it’s a misleading conflation of a school’s basketball coaches with the school itself—that coaches may act in their own interest in ways counter to their employers’, and that the universities would consider themselves harmed by such cheating, hence the defendants’ great efforts to conceal their actions.
As massive businesses built around unpaid students pursuing what was once simple extracurricular activity, major college sports are, when viewed from the outside, an odd and unnatural endeavor. Nowhere outside the United States do academic institutions of higher learning pursue multimillion-dollar athletics side projects under the university umbrella. (And it’s doubtful there exists anywhere else that conspiring to pay a talented athlete would result in a need to conceal that would result in federal criminal charges.) The resulting power structure—in which public universities’ basketball and football head coaches are often states’ highest-paid employees and the school’s most visible, yet are beneath university presidents and provosts and so on in school’s internal hierarchy—opens itself to questions when it comes to whether those coaches’ actions and interests can be considered representative of the schools’.
Almost immediately upon the arrests of Code, Dawkins, Gatto, and seven others last September, the conversation surrounding the case was dogged by a common question: If paying basketball players to play for a certain college is a crime, who are the victims? In many corners the government’s contention that the victims are the schools whose teams are receiving said players drew scoffs. The idea that, say, Louisville breaking NCAA rules to land a recruit would result in fraud against Louisville was often and understandably construed as counterintuitive.
But in its closing arguments on Wednesday, the prosecution offered its best articulation yet of why that would be the case. Assistant U.S. attorney Noah D. Solowiejczyk attempted to simplify what has at times been an unwieldy and esoteric case. Solowiejczyk outlined the lengths the defendants undertook to conceal their actions—cash drops in parking lots and hotel rooms, “sham” invoices, secret so-called “Bat phones”—so that they would not be discovered by university compliance teams. By having such offices dedicated to NCAA compliance, Solowiejczyk said, the universities are making clear that they would not have approved such means of ostensibly improving their basketball teams.
In order for these players to be admitted into their basketball programs, Solowiejczyk, “the defendants knew full well that these universities had to be lied to.” By deceiving them regarding the players’ eligibility, the prosecution contends, the defendants deprived the schools of “the ability to make an informed decision” on finite assets, in this case athletic scholarships. They also knowingly “exposed the universities to the very real risk of fines and other penalties” including forfeited games and the surrender of performance-based revenue, should players who competed for the schools later have be found to have been ineligible.
“You don’t help someone by ensuring they’re provided with false information,” Solowiejczyk said. Such deception, Solowiejczyk argued, “was the entire point of the defendants’ scheme.”
Only one of the three defense teams made their case Wednesday. (The remaining two will have their turn Thursday morning.) In his closing remarks, Steve Haney, representing Dawkins, outlined first why his client was not guilty of the first count of conspiracy to commit wire fraud against North Carolina State, Kansas, Miami, and Louisville. The compliance offers from NC State and Kansas, Haney said, never mentioned Dawkins’s name in their testimony. The transaction involving Miami—a payment made to AAU coach Brad Augustine to steer prospect Nassir Little to the Hurricanes—resulted in Augustine keeping the money (thus not compromising Little’s eligibility) and in Little not even attending Miami (thus not exposing them to any fraud).
When it came to Louisville, which was also the only school involved in the second count (of actual wire fraud, rather than conspiracy to commit it), Haney argued that while Dawkins helped facilitate a $100,000 payment to the father of recruit Brian Bowen, he did so without having any ability to influence Bowen’s decision and, rather than conspiring to help Adidas, Dawkins had personally recommended that Bowen attend Nike-sponsored Michigan State (for no payment) and also consider Nike-affiliated UNLV and Oregon. And because Dawkins believed his lifelong personal relationship with the Bowen family would have made payments by him to Bowen fall under a “prior relationship” exemption to NCAA rules, Haney argued that Dawkins had no criminal intent to harm Louisville.
The prosecution, Haney reminded jurors—to such an extent he was chided by Judge Lewis A. Kaplan—carries the high burden of proving its case beyond a reasonable doubt. As strong as the prosecution’s closing arguments, the fact that the intent of Code, Dawkins, and Gatto must be proven too could bode well for the defense. The jury must consider the possibility that while the defendants may have mislead the universities, they intended—misguidedly or not—to do so for the universities’ benefit.
It is among several questions with which the jury will begin wrestling once closing remarks conclude on Thursday. So much of the case will depend on interpreting what was intended and what would constitute the university’s best interests—and, indirectly, whether Code’s claim that “my colleges win” amounts to truth.
In the sports world wherein much of this case’s discussion has taken place, that idea seemed logical. But to a jury drawn from the general public, it is nearly impossible to project how the arguments over whether universities illicitly receiving the services of highly talented basketball players were actually being defrauded. “Use your common sense,” Solowiejczyk repeatedly implored the jurors.
From the outside, so much of the college sports industry can seem to run counter to that. Now some of those who operated unseen on its inside wait to find out the view from the jury box.