Rich Paul, the agent at the center of an eligibility scandal at the University of Texas, may have violated Texas state law because of his involvement with Longhorns guard Myck Kabongo, Yahoo! Sports has learned.
Upon appeal on Friday, the NCAA reduced a season-long suspension of Kabongo to 23 games for accepting airfare, professional training and providing false information to university officials.
The NCAA did not name Paul, a Cleveland-based agent who represents LeBron James, in its findings.
Despite fitting the state of Texas' criteria of an active sports agent, records shows that Paul has never registered with the secretary of state's office, an apparent violation of the state's statue on sports agents. Any individual conducting business with college athletes in the state is required to register.
More than 100 agents are listed as registered in the secretary of state's public directory.
Paul did not register with the National Basketball Players Association as an agent until leaving his job at Creative Arts Agency in August and launching Klutch Sports Management group based in Cleveland. Paul brought childhood friend LeBron James and two former Texas players – Cleveland's Tristan Thompson and San Antonio's Cory Joseph – as clients for his new company.
Paul was an active recruiter of high school and college players with CAA and his contact with Kabongo met the standards of Texas' criteria for registration with the state. While Paul wasn't an agent of record for the players, he had a six-figure salary and engaged in the recruiting and servicing of clients for the company, sources told Yahoo! Sports.
Texas' law states that an individual is considered an agent if "for compensation, directly or indirectly recruits or solicits an athlete to enter into an agent contract, a financial services contract, or a professional sports services contract with that individual or another person."
Among the statutes in the Texas Occupations Code that Paul is in jeopardy of violating include the forbidding of an agent to directly contact an athlete prior to his last college sporting event, as well as a statute that doesn't allow an agent to provide anything of value to a player.
"An athlete agent must register with the Secretary of State before the athlete agent may contact an athlete, either directly or indirectly, while the athlete is eligible," the statute says.
Under terms of the Texas code, an agent is also "prohibited from committing an act that causes an athlete to violate a rule of the national association for the promotion and regulation of intercollegiate athletics or which the athlete's institution of higher learning is a member."
Paul did not respond to Yahoo! Sports' multiple requests for comment.
Kabongo traveled to Cleveland in May to work out with Jerry Powell, a high-level trainer affiliated with Paul. Kabongo and Powell had been working with Thompson, a high school and college teammate.
Paul confirmed to Yahoo! Sports in an October interview that he had a relationship with Kabongo. He didn't deny a Y! Sports' report he had represented Kabongo's interests in conversations with NBA front-office executives about the player's prospects for the NBA draft.
Multiple NBA officials told Yahoo! Sports that Paul had sought their opinions on where Kabongo would be selected should he have decided to leave Texas after his freshman season.
In an interview with Yahoo! Sports in October, Paul said, "It's no crime to have a relationship with the kid. Of course, I know Myck through Tristan and Cory."
In the state of Texas, for an agent registered or unregistered, it could be considered problematic.
The Texas Occupations Code has provisions for the Secretary of State to exert subpoena and summons power to investigate potential agent violations, with the power to ultimately "refer the violation to the attorney general for prosecution." The NCAA does not hold subpoena powers in its investigations.
The Secretary of State has the power to impose a fine of up to $50,000 for violations of the Occupations Act.
"Generally, the Secretary of State's Office will investigate improper activity once it receives credible allegations of such activity," Secretary of State press officer Rich Parsons recently told Yahoo! Sports in an email.
"Beyond that, it is the policy of this office not to comment on whether an investigation is being considered against anyone or if an investigation is in progress."
While the Texas statute allows for a university to file a civil suit against an agent, multiple sources with knowledge of the relationship between the Texas basketball program don't think it will pursue action against the agent.
The NCAA's severe suspension for Kabongo arose from its ruling that he had been untruthful with university officials about a trip to Cleveland in May that included a workout with Powell, who has strong ties with Paul.
Paul's relationship with Kabongo, Paul said, had come through Thompson and Joseph. Thompson, Joseph and Kabongo all grew up in the Toronto area and went on to play at the University of Texas. Paul played a part in recruiting Thompson and Joseph to CAA as an employee there, and those players followed him to Klutch Sports where Paul serves as their agent.
Powell told Yahoo! Sports in October that he conducted a workout with Kabongo in Cleveland, but denied that Paul had been the conduit to setting it up, or that he had been present. Thompson says he told the NCAA that he paid for the trip to Cleveland.
Paul's recruitment of amateur players as an employee of Creative Arts Agency preceded his application with the National Basketball Players Association this fall to become a registered NBA agent. Paul worked as a recruiter for CAA for several players, including 2009 first-round pick Jonny Flynn, the Los Angeles Clippers' Eric Bledsoe, as well as Thompson and Joseph.
Despite other CAA agents, including Leon Rose, being registered in the state of Texas, Paul wasn't covered as a part of the company.
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