The federal government dropped a bomb on college basketball Tuesday, indicting 10 men in a wide-spread fraud and bribery scheme involving top recruits, college programs, agents, financial planners and the shoe and apparel company Adidas.
It’s thorough. It’s ugly. It’s unprecedented.
“Fraud and corruption in the world of college basketball,” Joon H. Kim, Acting U.S. Attorney said at a news conference in Manhattan on Tuesday.
Assistant coaches at Arizona, Auburn, Oklahoma State and USC were all arrested and their programs are almost certainly in dire straights with both the Department of Justice (DOJ) and NCAA. The evidence here is based on an undercover FBI agent, wiretapped phones, recordings, written communication and financial transaction data. The feds win nearly every case for a reason. And the indicted haven’t even started flipping yet.
Also in the crossfire is so-called “University 2,” which in the complaints is described in a way that resembles the University of South Carolina and only the University of South Carolina – “a public research university located in South Carolina … with over 30,000 students …”
Then there is “University 6” which is described in a way that resembles the University of Louisville and only the University of Louisville, linking it to a $100,000 payout for one recruit and a potential $150,000 payout for another, all while on probation for a scandal involving using prostitutes to lure other recruits. “University 6” doesn’t appear to be in any legal trouble, yet, but the NCAA is another story.
The above alone consist of a national championship program with a Hall of Fame coach (Louisville), a Final Four team from 2017 (South Carolina), historic powerhouses (Arizona, Oklahoma State), as well as major schools (USC and Auburn) with a history of NCAA problems.
Death penalty. Postseason bans. Mass firings. It’s going to be a scorched earth, the bill coming due on a sport that has operated in the shadows of corruption for generations.
Yet for college hoops none of it represents the scariest part of the three complaints laid out by the DOJ on Tuesday. This, a statement by said undercover FBI agent, should terrify every coach in America:
“Because this affidavit is being submitted for the limited purpose of establishing probable cause, it does not include all of the facts that I have learned during the court of the investigation.”
Meaning, this is the tip of the iceberg.
“Our investigation is ongoing,” FBI assistant director Bill Sweeney warned. “And we are currently conducting interviews.”
“If you yourself engaged in these activities, I’d encourage you to call us,” said Kim, the Acting U.S. Attorney. “I think it’s better than us calling you.”
The operation that the feds laid out is college basketball recruiting 101. It began when a prominent financial planner from the sports world was ensnared in a securities fraud case and turned into a cooperating witness. He was able to bring an undercover FBI agent along as a supposed assistant for meetings, payouts, recorded conversations and so on.
Top basketball talent is worth more on the open market than the NCAA limit of scholarship, room, board and a small stipend. NCAA limits are an attempt to stop the wheels of capitalism, which like floodwater will simply readjust and go where it wants.
A top high school player can make a school and its coaches millions. His future potential can make shoe companies and others even more. His likely NBA earnings in this era of the one-and-done make him a coveted future client for agents, financial planners, even clothiers, real estate agents and car salesmen.
Families, aware of their son’s worth, have their hands out.
“The mom is like … we need our [expletive] money,” sports agent Christian Dawkins is alleged to have said during a July 27 meeting in a Las Vegas hotel room about the mother of a top recruit in the class of 2019, according to the indictment.
It came during a meeting between Dawkins, Brad Augustine, a prominent Florida-based travel team basketball coach, an assistant coach from “University 6,” the cooperating financial planner and the undercover FBI agent, who recorded it and bugged the room.
Paying the family to go to a certain school not only aids the school’s team on the basketball court, it builds up the relationship between the player/family and the assistant coach. The school gets a great talent, while the assistant coach creates additional trust with the player/family.
Those college coaches then receive kickbacks ($13,000 here, $9,000 there, according to the indictments) from Adidas or the agents/financial planner to steer the player to them when he reaches the NBA. A young player turning pro will almost always seek guidance on who should represent him, or who can give him a good deal on a car or a draft night suit.
One hand washes the other. Rinse and repeat.
None of this is any surprise for anyone who follows the sport. Proving it, though, has always been nearly impossible … neither the NCAA nor investigative reporters have the resources of the FBI, nor the ability to provide the legal pressure that flips someone into a cooperating witness.
So now the lid is off the jar and where this ends is anyone’s guess.
Tuesday, college coaches were calling emergency staff meetings and coaches at all levels were consulting attorneys. This is an entirely different level than anyone has seen before, not a mostly toothless NCAA, but a motivated FBI and U.S. Attorney in New York looking to make a big media splash.
And splash they will. Even if there aren’t legal ramifications for everyone, the recruiting dirt that is about to get turned over will be unprecedented. The code of silence that has protected the sport and the NCAA’s system of “amateurism” is about to be cracked into a million pieces under FBI questioning, where a single lie is a felony.
The NCAA may be backed into a corner where it needs to blow up one of its signature revenue producers. And financial planners don’t just care about basketball. Football players make big money, too.
In basketball, nearly everyone has recruited Brad Augustine’s “1 Family Hoops” out of Florida, which is annually loaded with talent as one of Adidas’ signature programs. Nearly everyone knows powerful Adidas executive Jim Gatto, who was arrested, too. All of the indictments Tuesday stem mostly from the acts of one financial planner and one agent.
There are many more who operate the same way. Who knows when the heat shifts to them.
Big, bigger … biggest scandal ever.
Tuesday was Armageddon for college basketball. Tomorrow and the tomorrow after that and the tomorrow after that promise to be worse.
View the indictments here: