FBI informants claim that the 1981-1982 Knicks were purposefully losing for their drug dealer, who bet on the games. From The New York Post's report:
The feds probed whether three Knicks, reportedly “heavy users of cocaine,” and their supplier, “one of the largest dealers on the East Coast,” shaved points, according to FBI documents cited in Brian Tuohy’s book, “Larceny Games: Sports Gambling, Game Fixing and the FBI.”
The dealer was a degenerate gambler who usually bet $300 a game, informants told investigators, but in January 1982 he began laying $10,000 wagers on Knicks’ opponents — and winning them.
By March 25, the coke dealer had won six of his seven five-figure bets against the Knicks — while continuing to make his normal $300 wagers on other NBA games.
The Post's report states that FBI investigators believed certain Knicks players were actively shaving points and even betting against themselves.
The names of the players and drug dealer have been redacted, but the Knicks were led that season by Micheal Ray Richardson, who was banned for life from the NBA in 1986 for violating the NBA's drug policy three times. From the report:
“Hell no!” Richardson, 58 and living in Texas, told The Post when asked about the point-shaving allegations. “We never did anything like that.”
The FBI probe lasted until 1986, and included reports of the dealer conspiring with “various professional basketball teams to shave points.” The case was closed in 1986 without any arrests due to a lack of physical evidence and confessions, an FBI spokeswoman said.