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  • Convincing closing arguments from both sides ended Thursday in New York, but the case is anything but simple as it moves to jury deliberations next week.
By Dan Greene
October 18, 2018

NEW YORK — Simplicity. After more than two weeks of testimony that included dissections of an apparel company’s corporate hierarchy and invoices, tales of hotel-room and parking-lot cash drops and lavish expense accounts, and a slew of Rorschach-like text messages and wiretap transcripts from which both intent and subtext was attempted to be extracted, all of which culminated in some six hours of closing arguments spanning two days—after all of that, simplicity is what the prosecution hopes rules the day in the federal fraud case against two Adidas employees and an aspiring player agent that has been playing out in the U.S. District Court in downtown Manhattan.

The defendants—Adidas executive Jim Gatto, former Adidas consultant Merl Code Jr., and NBA agency recruiter Christian Dawkins—conspired to pay basketball recruits, said prosecutor Edward B. Diskant in the government’s closing rebuttal, in a way that would render them ineligible under NCAA rules. They then conspired to hide such actions from the universities involved. And in doing so, Diskant contended, they defrauded the schools of athletic scholarships they awarded under false pretenses and denied their ability to make informed decisions regarding their assets.

“It’s just that simple,” Diskant told the jury at the end of his remarks. “It’s just that straightforward. It’s why we’re here today. It’s why the defendants are guilty.”

If only. As the jurors begin a three-day recess before the judge announces his charges and deliberation begins on Monday, they must wrestle with a complex case where few facts are in dispute but questions regarding whether they constitute criminal acts remain very much open for interpretation.

None of the three defendants dispute that they broke NCAA rules regarding amateurism. The government contends in doing so they conspired to mislead the universities into fraudulent scholarship offers and knowingly expose them to the risks of NCAA violations, as demonstrated by the great extent to which they covered up their actions. The defense, seizing on the federal wire fraud statute’s requirement of “intent,” has argued that Code, Dawkins, and Gatto only meant to assist the universities by steering talented players to their basketball programs, and that they operated under the good-faith belief that the basketball coaches had the authority to approve of such activity on the schools’ behalf.

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Without much precedent, it has been hard to forecast which argument will carry more sway. Throughout the trial, both prosecution and defense made thorough and convincing cases in support of their premise, but what has been noteworthy to trace is the shifting value of simplicity to each side. When the government announced its 10 arrests in the case last September, many onlookers saw a straightforward logic that undercut the criminal theory: If the schools’ basketball teams were the ones receiving elite players, how were they the victims?

Yet in each defense team’s turn during closing remarks, attorneys wove complex (yet easily followed) arguments progressing through each count—conspiracy to commit wire fraud and wire fraud against all three defendants, and an additional count of wire fraud against Gatto—with details framed to disconnect their client from any alleged criminality. Yesterday Steve Haney, representing Dawkins, established such a framework by distancing Dawkins from any actions involving Kansas or North Carolina State and contending that because the recruit in question was not paid and never attended Miami, there was no fraud against that school in the first place. Dawkins facilitating a payment to Louisville signee Brian Bowen, Haney contended, was done under the belief that their lifelong relationship would preclude the action from NCAA punishment.

Merl Code Sr., representing his son, began Thursday’s proceedings with an impassioned, clever, and colorful defense. He implored jurors to “fold your arms across your chest” in figurative resistance against a government case that he painted as insufficiently proving the charges beyond a reasonable doubt. He described the prosecution as “trying to use a sledgehammer” to fit a square peg of evidence into a round hole of the law; earlier he had likened them to a magician he had seen win on America’s Got Talent.

At one point in his remarks Code Sr. characterized the government’s case as a misleading bundling of non-criminal actions by his son intended to appear, in aggregate, as a crime. To illustrate this he raised a closed left hand toward the courtroom ceiling, extending each finger one by one until his whole grip was undone. “Not a crime,” Code Sr. repeated with the outward flick of each finger. “But you ball up your fist, put them together,” he continued, while withdrawing his fingers back into his hand, “now Merl has committed a crime? Makes no sense.”

Code Sr.’s most memorable moment came when he improbably introduced a theoretical discussion of homicide. Because Bowen’s father had testified that he had solicited and received money for his son to play for various AAU programs and high schools, Code Sr. argued, the younger Bowen was already ineligible to play for Louisville, thus nothing Code Jr. did to pay him would have impacted his eligibility. Code Sr. then likened his son’s actions to using a gun to shoot a corpse.

“You can’t kill a dead man,” Code Sr. said. “He’s already dead.”

Showmanship aside, much of Code’s closing remarks echoed Haney’s attempts to pick the prosecution’s case apart piece by specific piece. Code too was not implicated in the alleged fraud involving Kansas and NC State, he argued, and the Miami-related charges regarded an arrangement that never rendered the involved prospect ineligible and never resulted in him attending Miami. For the Bowen-to-Louisville scheme, Code Sr. too focused on fraud’s requirement of intent, re-playing for the jury a wiretapped conversation in which his son, an Adidas consultant, said, “We needed to step up and help one of our flagship schools in Louisville.”

Michael Schachter, Gatto’s lead attorney, delivered the defense’s final closing remarks, in first invoking simplicity for his own side’s sake. It made no sense, Schachter said, that Gatto would victimize colleges that it was his job to support. “Why would he do that?” Schachter asked. “Why would Jim want to defraud a school that Adidas sponsored?”

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Gatto’s intent, Schachter argued, was also easy to derive from his private remarks that the government was recording and introduced as evidence. “He thought that Adidas schools would be better off with those kids on the court,” Schachter said. “To Jim, this was a win-win-win.” Even the government’s key witness—T.J. Gassnola, an “underground” dealmaker for Adidas who testified to avoid his own charges of tax evasion—repeatedly described his collaborations with Gatto as intended to help the schools Adidas was sponsoring.

But in the prosecution’s closing rebuttal, Diskant urged jurors not to conflate the wishes of those leading a school’s athletics with the desires of the school itself. “The University of Louisville is not a basketball team,” Diskant said. “It’s a public university.” He also dismissed Code’s corpse-shooting analogy by providing one of his own: One would not be innocent if they joined a bank robbery in progress on the basis that the bank was already being robbed.

Diskant then provided a comparison of his own: If the defendants were charged with conspiring to inflate a student’s grades to earn a merit-based scholarship, or with obscuring their finances to qualify for financial aid, there would be no question it constituted fraud.

“It’s about obtaining scholarships under false pretenses,” Diskant said.

At times it seemed as if, should the format have allowed, the two sides could have deftly parried with one another for days on end. In dismissing the jury until Monday, Judge Lewis A. Kaplan—who had frequently and often entertainingly admonished the attorneys during the trial—was effusive in his praise of both sides’ remarks, praising them “without exception.”

Yet as convincing as the arguments may have been, they were anything but simple. The first of the trials in relation to this corruption scandal could require a length jury deliberation when it begins in Monday. It will be up to them to answer the question of whether clandestine rule-breaking to aid universities’ basketball teams constitutes a conspiracy to commit fraud against those schools. For those standing trial, it is far, far from a small matter. And it is unlikely, for those whose opinions now matter most, to be a simple one.

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