Acting New York Attorney General Joon Kim has singled out an Adidas executive as playing a main role in paying off young athletes to attend sponsored colleges.
Kim declined to specify Adidas by name during a press conference in Manhattan, but admitted the “Internet is an amazing thing” when discussing the role of James Gatto, Adidas’ Oregon-based director of global sports marketing for basketball, in an alleged scheme to financially bribe high school-age basketball players to attend certain universities it had sponsorship deals with.
When asked how high up the executive level the purported conspiracy between Gatto and a number of other advisers and basketball coaches for top-tier public colleges went, Kim only noted that Gatto was “quite senior” within his company.
“That in our view is pretty serious,” Kim added. “He clearly had the authority to funnel [large amounts of] money and book it in a way to disguise it.”
Kim said the undercover investigation revealed Gatto’s knowledge of his wrongdoing and recorded him admitting he’d tried to conceal the bribe payments by saying “it’s on the books but not on the books for what it’s actually for.”
Kim went on to say that there are no allegations against Adidas as a company, but the investigation, covert until today when arrests were made, is ongoing.
Gatto’s role in the scheme allegedly involved “secretly funneling” bribes upwards of $100,000 to individual high school players and their families in order to get them to attend two unnamed public universities with which Adidas has sponsorship deals.
He was indicted on three counts of wire fraud and one count of money laundering. He’s been an executive at Adidas since 1993.
Merl Code, a former manager of Nike’s Elite Youth Basketball program who is said in the indictment to have recently “joined” Adidas, is facing the same charges.
A spokeswoman for Adidas said the company today “became aware” of one employee’s arrest and that it’s “learning more about the situation.”
“We’re unaware of any misconduct and will fully cooperate with authorities to understand more,” she added.
The accusations against Gatto and Code are part of a broader, dual investigation over the last several months led by the New York attorney general’s office and the Federal Bureau of Investigation into “conspiracy” and bribery between college basketball coaches, athletic and financial advisers and sponsors for the placement of young athletes.
Kim said during the press conference that the resulting image of college basketball presented by the investigation against the group of men “is not a pretty one” and said all of the defendants “circled blue chip prospects like coyotes.”
Others involved in the scheme are Christian Dawkins, a former NBA agent; Jonathan Brad Augustine, president of nonprofit The League Initiative; Munish Sood, a financial adviser, and coaches Lamont Evans of Oklahoma State, Emanuel Richardson of Arizona State, Anthony Bland of University of Southern California and Chuck Connors Person of Auburn State. Rashan Michel, who owns and operates Thompson Bespoke Clothiers in Atlanta, is also facing charges.
The coaches allegedly took cash payments outright from the advisers and Michel with the promise of using their influence over young players to get them to use their services. Kim said the investigation resulted in hundreds of hours of tape where coaches can be heard referring to their actions as “illegal,” as well as their ability to influence young players whom they knew trusted them implicitly.
Gatto, Code and Augustine, meanwhile, would facilitate large payments to high school players and their families to get them to universities Adidas had sponsorship deals with, according to the indictments unsealed Tuesday.
As for how the investigation got underway, Kim said they were tipped off by a financial adviser who became a “cooperative witness” after being charged with fraud last year by the Securities and Exchange Commission.
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