- Brian Bowen says Adidas conspired against him and his family, forcing them to take $100,000 from the shoe company. Adidas will inevitably deny those claims and try to convey their innocence. Might both parties be better off settling out of court? What does all of this mean for the NCAA? Our legal expert explains.
Corruption in college basketball has led to convictions of Adidas executives for wire fraud and conspiracy. Could it soon lead to a finding that Adidas itself is part of a far-reaching criminal syndicate? Is the athletic footwear company, along with the college coaches who profit handsomely from it, like the mafia? And are five-star recruits and McDonald’s All-Americans the unwitting victims?
These questions lie at the heart of a new lawsuit filed by former high school basketball phenom Brian Bowen in the U.S. District Court for the District of South Carolina. The now 20-year-old Bowen, whose family was allegedly paid $100,000 as an inducement for Bowen to attend Adidas-sponsored Louisville, has sued seven defendants. They include Adidas and three Adidas-connected sports business professionals who were recently convicted of federal wire fraud and conspiracy: Adidas director of global marketing James Gatto, Adidas consultant Merl Code and client recruiter/runner Christian Dawkins. Three others with Adidas ties were also named as defendants. They are financial advisor Munish Sood and former AAU coach T.J. Gassnola—both of whom recently pleaded guilty to conspiracy charges—as well as Adidas player relations manager Christopher Rivers, who influences which teams receive Adidas sponsorships.
The case has been assigned to U.S. District Judge Joseph Anderson. In the coming weeks, Adidas will answer Bowen’s complaint and later seek to have the lawsuit dismissed.
Bowen and his claim of a racketeering scheme
Bowen, who plays professionally for the Sydney Kings in Australia’s National Basketball League, contends that the seven defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO). It is primarily designed to enhance the capabilities of federal authorities to combat the mafia and other organized crime rings. Prosecutors can bring forward RICO criminal charges while private parties, like Bowen, can plead RICO civil claims.
RICO has been deployed against a wide range of entities, from drug cartel members to Wall Street executives to FIFA officials. It targets organized groups that run illegal enterprises, which are called rackets. Sometimes rackets appear legitimate, even going so far as to pay taxes and adhere to other legal conventions. However, they are secretly engaged in unlawful acts. Bribery, money laundering, wire fraud and illegal gambling are all indicia of rackets. Often it is an informant, whistle blower or undercover cop who relays to authorities their knowledge about the racket’s transgressions.
RICO is an especially worrisome law for defendants because of its onerous penalty scheme. Defendants who are found liable under RICO are obligated to pay treble damages and attorneys’ fees. “Treble damages” equals the amount of financial harm suffered by the plaintiff multiplied by three. Treble damages are designed to enhance deterrence: defendants are less likely to engage in wrongdoing if they run the risk of having to pay a steep financial price that far outweighs the potential gain. To illustrate, if Bowen proves that illegal racketeering irreparably damaged his trajectory for an NBA career and will ultimately deny him $50 million in career basketball earnings, the defendants would have to pay him $150 million (and also reimburse his attorney, W. Mullins McLeod, Jr., for his fees).
In the federal complaint drafted by his attorney, Bowen attempts to classify various college basketball figures as members of an intricate criminal enterprise overseen by Adidas. Along with its employees, consultants, financial intermediaries and “numerous AAU and NCAA Division I men’s basketball coaches”, Adidas and its alleged associates are accused of conspiring to “infiltrate amateur athletics.” Using bribes, this so-called infiltration “preys” upon the families of elite recruits “in order to get their children to play basketball at Adidas-sponsored universities.”
Bowen argues that while the accused conspirators hold different positions and thus have different stakes, their interests converge for the pursuit of profit. Each accused conspirator is alleged to have partaken in the criminal enterprise for selfish financial gain. Adidas, for example, secures increased market share, particularly at the expense of market leader Nike, when Adidas-sponsored programs attract the best recruits. Those recruits are then bound to wear—without compensation—Adidas gear in public settings, including during nationally televised games on ESPN and CBS. Even better for Adidas, recruits who become acclimated to the Adidas brand early on in their development are likely to become more inclined to sign Adidas endorsement deals when they enter the NBA.
The other defendants are also portrayed as beneficiaries of the racket. Employees and consultants of Adidas gain professional advancement by impressing their bosses and industry peers. Adidas-connected college and AAU coaches acquire elite players who will help them win games and in turn help those coaches negotiate higher-value employment contracts. The last set of winners: the various financial intermediaries and client specialists who play integral “behind-the-scenes” roles. They become connected to a marquee footwear company and future NBA draft picks.
Bowen’s complaint concedes that his family received lucrative payments in exchange for Bowen agreeing to play at Louisville. Yet Bowen, whom Louisville suspended indefinitely and whom the NCAA ruled ineligible after he transferred to South Carolina, characterizes these disbursements as damaging rather than as beneficial.
To that end, Bowen stresses that in exchange for his father receiving as much as $100,000, Bowen lost: (1) the eligibility to play Division I college basketball; (2) the eligibility to receive financial aid necessary to continue his education; and (3) “the singular opportunity to develop physically and athletically” into a potential NBA draft pick at a D-I school.
Bowen stresses that he was led to believe that he would “develop his God-given talents as a basketball player” by playing in an elite program and by being coached by Rick Pitino, who until recently was a legendary figure in college hoops. Instead, Bowen contends, Adidas and its co-conspirators corrupted him and other similarly-situated elite recruits, some of whom, Bowen cautions, were “unsophisticated and come from poor or modest backgrounds.” Bowen and these players allegedly “became pawns” of an Adidas-orchestrated conspiracy that maximized profit while recklessly endangering young men’s education and athletic careers.
This sort of exploitation, Bowen contends, begins in high school when Adidas initiates contact with elite recruits. The company then features them in promotional photos, thereby linking the player to Adidas’s distinctive three-bar logo. Later on, Adidas “secretly funnels money” to the players’ families, which basically traps the player in the conspiracy: If he tells anyone, he loses his NCAA eligibility and becomes tainted by corruption. Essentially, players become duped into becoming poker chips for Adidas.
Bowen’s complaint, as drafted by his attorney, even goes so far as to connect Adidas’s pursuit of amateur talent to the institution of slavery and slave labor. Consider this explosively-worded paragraph:
Plaintiff is informed and believes many responsible, for-profit corporations would classify Adidas’s infiltration of amateur athletics and use of an individual athlete without compensating him as nothing more than exploitation. For Adidas, however, it was business as usual. Perhaps the profits were so lucrative Adidas and its executives convinced themselves that exploiting amateur athletes like Brian for profit is acceptable much the same way plantation owners convinced themselves that slave labor was acceptable.
It’s fair to say that Bowen hopes that his 83-page complaint not only proves a legal argument but also sheds light on controversial industry practices that disproportionately impact African-American players.
Game-planning the defendants’ potential defenses
Adidas and the other defendants will soon answer Bowen’s complaint. The defendants will obviously deny Bowen’s claims. As the litigation develops, the defendants will also offer substantive responses to Bowen’s factual and legal assertions. Below are some of the likely defenses.
First, the defendants will dispute Bowen’s retelling of facts. Bowen relies heavily on his and his family’s recollections, transcripts from the recent criminal trial involving Gatto, Code and Dawkins, supposed text messages and bank transactions, and various published sources. It’s fair to assume that Bowen’s universe of knowledge is incomplete, particularly as it relates to communications between, and accompanying motivations of, the seven defendants. Expect the defendants to offer competing facts, including those that directly contradict Bowen. Even when the defendants acknowledge that Bowen is accurate in some respects, they are poised to contend he has taken information out of context in hopes of creating the appearance of a criminal syndicate.
Second, the defendants will argue that Bowen is hardly a victim. To that point, Bowen and his family didn’t “have to” accept substantial sums of money in order for Bowen to attend Louisville. He could have declined the money and still attended Louisville. Alternatively, Bowen could have declined the money and selected another university. He didn’t do that, either. It’s hard to ignore the fact that a “bribe”—a word that appears numerous times in Bowen’s complaint—requires a willing recipient.
Along those lines, the defendants will stress that Bowen and his family obviously knew that they were breaking NCAA amateurism rules by accepting Adidas-tainted money. Despite such knowledge, they proceeded to engage in rule-breaking conduct. The defendants’ attorneys might thus invoke the “pari delicto” and “unclean hands” defenses. These are similarly designed defenses. The doctrine of pari delicto—which is Latin for “in equal fault”—bars a plaintiff who participated in the same illegal conduct as the defendant from recovering damages that emanate from the wrongdoing. The doctrine of unclean hands is slightly broader in that it prevents plaintiffs who engaged in illegal or unconscionable conduct related to the defendant’s wrongdoing from recovering. Either defense could potentially be used against Bowen: through his father, he received “bribes” that have been found to constitute crimes and are related to other fraudulent conduct.
Third, the defendants will insist that there was no conspiracy. Bowen’s complaint assigns interconnected roles to the individual defendants. For instance, he depicts Gatto as “the field marshal” of the racket because Gatto allegedly approved and rejected bribe requests, managed the budget and arranged for Adidas money to be laundered. For his part, Code is described as assisting Gatto while also serving as financial intermediary for the Adidas money. Rivers, meanwhile, is accused of helping to direct the bribes. The defendants will claim that, contrary to Bowen’s depiction, there were no “roles” and there was no organized relationship between them. While the defendants may have known each other and worked with one another on certain professional endeavors, they will insist that they lacked a “meeting-of-the-minds” necessary to advance a criminal plot at the behest of Adidas. To that end, some of the defendants possessed weaker professional ties to Adidas than others and would thus have seemed less incentivized to advance an Adidas-guided plot.
Likewise, the defendants will highlight that simple bribes do not require the kind of elaborate conspiracy envisioned by Bowen. To the extent the defendants helped one another, they will claim that it was sporadic and occasional, and not organized in any meaningful fashion. In that same vein, the defendants will go out of their way to depict their ties with one another as loose and informal, and unguided by any centralized source. Whether emails, texts and sworn statements support such a defense remains to be seen.
Fourth, the defendants will assert that they didn’t know payments to recruits could be construed as criminal acts. To that end, they’ll maintain that they lacked the intent to commit the underlying criminal acts that give rise to Bowen’s theory of racketeering. The defendants will also stress they operated on a genuine, good-faith belief that while bribe-like payments violated NCAA rules, there was no reason to believe that those payments would also be viewed as crimes. This belief could be bolstered by the fact that until Gatto, Code and Dawkins were convicted last month, no one who had paid, or facilitated the payment of, basketball recruits faced criminal charges over those payments.
Fifth, the defendants will try to debunk Bowen’s speculative theory of harm. They will claim that even the most gifted NBA talent evaluator knows how eligibility developments have impacted Bowen’s basketball trajectory. It’s not as if we are looking back in time on Bowen’s career and lamenting “what could have been.” He is only 20 years old and will be eligible for the 2019 NBA draft. Much like Brandon Jennings, who played as an 19-year-old in Italy before becoming an NBA lottery pick, Bowen has an opportunity to impress NBA scouts by playing well in Australia. His team, the Kings, feature former NBA center Andrew Bogut and play in a league—the National Basketball League—that employ a number of players who have connections to the NBA.
Through eight games for the Kings in the 2018–19 season, Bowen has averaged seven points and three rebounds in 17 minutes per game. Bowen could plausibly argue that his development might have been enhanced had he played college ball against competition his own age instead of pro ball against players who are in their mid 20s to early 30s. A jury, however, might struggle with assessing possible damages since the development of any young player is so uncertain. Expert testimony might help to clarify that point, but there would remain a healthy amount of guesswork and conjecture.
Risk of pretrial discovery and ties to NCAA investigations
Even if the defendants can eventually convince the court that they were not members of a criminal syndicate, they and others could suffer substantial reputational harm if the litigation advances into pretrial discovery. Discovery would involve sharing of emails, texts and other sources of evidence. Some of this evidence might embarrass and implicate certain individuals and athletic programs. Discovery would also require sworn statements about topics related to college basketball corruption.
The scope of persons implicated by Bowen’s complaint extends far beyond the seven defendants. Indeed, the complaint contends that Kansas head coach Bill Self “was aware of a bribe payment made to the legal guardian of Kansas recruit Silvio De Sousa by Adidas and communicated with Defendants Gatto and Gassnola about it.” The complaint raises similar claims regarding Kansas assistant coach Kurtis Townsend. Further, it details alleged Adidas-related racketeering at NC State, Miami and Louisville.
The potentially wide scope of the litigation is also seen through the kinds of harm Bowen depicts. As noted above, Bowen stresses that he and other recruits were duped by racketeering into losing their eligibility and that such duping has potentially wrecked their basketball careers. Mimicking federal prosecutors, Bowen also describes the universities as victims. The schools were allegedly “deprived” by enrolling ineligible recruits. Indeed, Bowen argues that “the defendants knowingly interfered with the universities’ ability to control their assets, including decision-making about the distribution of their limited athletic scholarships; and created a risk of tangible economic harm to the universities, such as the possible disgorgement of profit-sharing by the NCAA, monetary fines [and] restrictions on athlete recruitment and the distribution of athletic scholarships ...”
The further Bowen’s lawsuit advances, the more information it could uncover for NCAA investigators who will eventually decide whether to punish schools implicated in the corruption scandal. This dynamic could make it more likely that Adidas attempts to negotiate a settlement with Bowen. The risk of treble damages would also be a motivating force to pay Bowen a sum of money in exchange for him dropping the lawsuit. For now, however, expect the defendants to persuade Judge Anderson to dismiss the case.
We’ll keep you posted on developments in the litigation.