A top Adidas exec and two others were found guilty of corruption in a Manhattan federal court on Wednesday, a case that questioned the relationship between college basketball ethics and lucrative endorsement contracts with activewear labels.
Last September, as many as 10 people were accused of fraud and a scheme to bribe top high school basketball athletes “by means of false and fraudulent pretenses” into attending universities that had relationships with Adidas, including the University of Kansas, the University of Louisville and North Carolina State.
Jim Gatto, Adidas’ head of global sports marketing, Christopher “Christian” Dawkins and Merl Code, formerly of Adidas, were found guilty of all charges they faced. Gatto, who is described as “a high-level executive of a global athletic apparel company,” in the original court filing, was found guilty of wire fraud, conspiracy to commit wire fraud in connection with the University of Louisville and wire fraud in connection with the University of Kansas.
The men were accused of funneling $100,000 to the family of one high school player and $150,000 to another, in an effort to secure the players’ commitment to the university. The intent of the scheme, authorities said, was to eventually motivate the top players into endorsement contracts with Adidas.
“In addition to the scheme to defraud described herein, the investigation has revealed another scheme whereby athlete advisers make direct bribe payments to coaches at universities in exchange for those coaches’ agreement to influence and steer players under their control to retain the relevant athlete advisers,” documents filed with the court read.
The victims, it claimed, were the universities that awarded scholarships to players that were ineligible, violating National Collegiate Athletic Association rules.
The NCAA released a statement to WWD by e-mail saying, “We now know these three individuals charged with corruption in college basketball broke federal laws. As these are the first verdicts in a series of corruption cases, we will continue to review any relevant information about potential NCAA violations,” a representative from the NCAA said.
All three men are out on bail awaiting sentencing.