Why feds decided college basketball's corruption was worth their time

In the wake of four arrests of prominent college basketball assistant coaches and six others affiliated with the periphery of the sport, the first signs of a new normal for a beleaguered industry began to emerge on Wednesday and Thursday. Hall of Fame coach Rick Pitino was essentially fired at Louisville. His boss, juggernaut athletic director Tom Jurich, went down with him. And brushfires appeared all over – a resignation at Alabama, the U.S. Attorney’s office investigating an assistant coach at Miami and a report of the FBI subpoenaing Nike’s elite EYBL grassroots division.

Welcome to the future of college basketball, shrouded by scandal, scoured by the feds and everyone waiting for the next sneaker (company) to drop.

Perhaps the most revealing part of the past 48 hours came from numerous conversations with coaches and assistants throughout the sport. There’s a near-universal admission that they had no sense that the activities of coaches, agents and sneaker company reps were against the law. (The NCAA’s impotent enforcement department had been incapable of policing the grassroots underworld for decades.) The culture of the activities described in the federal court documents – buying players, steering players and brokering deals for kickbacks – has become such an engrained part of the sport’s culture that there was widespread shock that it was raised to federal government implications. The activities the feds are investigating, to many in college basketball, were considered business as usual.

We’re about to find out if the “few bad actors” Louisville coach Rick Pitino referenced – to an industry laugh track – has been an ensemble cast all along. Interviews with multiple legal experts revealed a unanimous conclusion that Tuesday’s spree of arrests, allegations and investigations appears to be just the beginning.

“I think the expectation of the U.S. Attorney’s Office and the FBI is that this is just the tip of the iceberg,” said former federal prosecutor Edward McDonald, now an attorney with Dechert LLP in New York. “Some of these people have been charged are beginning to cooperate and there’s others who may have been in the line of fire. It could explode and be [dozens] of people, if not hundreds.”

The federal government dropped a bomb on college basketball Tuesday, <a href="" data-ylk="slk:indicting 10 men in a wide-spread fraud and bribery scheme;elm:context_link;itc:0;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;" class="link  yahoo-link">indicting 10 men in a wide-spread fraud and bribery scheme</a>. (AP)
The federal government dropped a bomb on college basketball Tuesday, indicting 10 men in a wide-spread fraud and bribery scheme. (AP)

College basketball’s corrupt culture is going up against perhaps the most prestigious U.S. Attorney’s office in the country, the Southern District of New York. And this could end up as mismatched as a No. 1 vs. No. 16 seed in the NCAA tournament. Alums of that office include former New York mayor Rudy Giuliani, former FBI director James Comey and recent Donald Trump nemesis, Preet Bharara. Former FBI director Louis Freeh also worked in that office, and he just got hired by USC to investigate what happened with assistant coach Tony Bland’s arrest. A New York Times story from 2009 called the office “A Stepping Stone for Law’s Best and Brightest.” One of the lead characters in the television show “Billions” is the U.S. Attorney of the Southern District of New York.

It was interesting to see SEC commissioner Greg Sankey release a statement on Wednesday that essentially cheered for the federal government to come in and accomplish what endless NCAA working groups could never do – clean up the sport: “I find encouragement, however, in the federal government’s willingness to utilize the powerful tools at its unique disposal to hold responsible parties accountable.”

Why the mismatch? Legal experts note the resources available to the feds include the full scope of the IRS, 35,000 FBI employees and the ability for an office filled with ambitious lawyers to generate more headlines. One lawyer compared the difference between a federal investigation to a state one as the difference in resources between the ACC and American Athletic Conference.

The next step for the feds will be how the 10 people arrested in the case will react. This is college basketball and not organized crime, where a code of silence is pervasive. Is Chuck Person really going to stay quiet to protect the sanctity of Auburn basketball? One would think the 10 arrested in this case would trend more toward the typical white-collar crime response of looking out for only those wearing the white collars. Do these coaches, agents and sneaker executives want multiple years in jail? Or will they pass on information that could decimate prominent college basketball programs for years?

The sentencing maximums in the case – 200 years for agent Christian Dawkins and financial planner Munish Sood and 80 for the other eight implicated – aren’t anywhere nearly the reality. The money amounts involved, especially for the coaches, don’t appear to be significant enough to command lengthy sentences under federal guidelines. Defense lawyers told Yahoo Sports there is a strong likelihood that even a conviction may result in only probation. The tension will be whether the leverage of jail time is significant enough to get the accused to not even risk trial and instead start talking.

“If you have relevant information about other people, this would be a good time to let the government know that,” said a former federal prosecutor who asked to remain anonymous. “These coaches have the ability to throw people under the bus. Now is the time to do it. There’s a lot of worried coaches and agents right now.”

There’s also a lot of worried corporations. Adidas has received a majority of the attention because of the arrest of executives Jim Gatto and Merl Code. But the former prosecutor predicted that there are vexing corporate conversations also going on at Nike and Under Armour, which are both aggressive players in the shadowy world of grassroots basketball. Code and Gatto face a maximum sentence of 80 years, and they certainly weren’t bidding against themselves for players.

“I have to think every major shoe company is conducting a thorough review of their own practices,” said the former federal prosecutor. “If you tell the government before they come to you, it serves you great benefit. If you are Nike or Under Armour, you can’t put your head in the sand and think this can’t touch you.”

The news of the feds raiding the office of prominent NBA agent Andy Miller also caused a ripple through the industry. Miller’s client list includes prominent former NBA players like Kevin Garnett and Chauncey Billups and current star Kristaps Porzingis. Miller is considered one of the most aggressive agents, as he’s been involved in multiple NCAA dustups before. The NCAA released an email he sent to four AAU team directors in 2012 that was a window into business as usual for agents recruiting top players: “I’m tired of being the one guy who has to get the first-round picks every year.” He implored the coaches to “plow down walls” and “manifest chaos” to deliver players. Miller also denied employing an infamous runner, Ken Caldwell, whose activities landed UCF in significant NCAA trouble. Caldwell listed Miller’s agency on his LinkedIn page.

The agent system has long intertwined with the AAU world, so deep that most agents and their runners start contacting kids as high school underclassmen. Money funneled to prospects and their families long before they chose a college has long been a way of doing business. “Andy Miller isn’t doing anything that every NBA and NFL agent is doing,” said an agent who asked to remain anonymous. “Is the entire industry of representing NBA and NFL players illegal?”

How far will it go? How long will it go? If the U.S. Attorney’s Office is sophisticated enough to bring down mob families, it’s certainly equipped to navigate grassroots and college basketball.

Multiple lawyers mentioned on Wednesday that prosecutors like headlines, and acting U.S. Attorney Joon Kim certainly found plenty of those after his news conference on Tuesday. While the federal government has a duty to stop crime between states, the explosive nature of this story makes it unlikely the U.S. Attorney’s Office doesn’t see it through.

“Look at the attention they are getting,” said Sports Illustrated legal analyst Michael McCann, who is the director of the Sports and Entertainment Law Institute at the University of New Hampshire. “This is just the beginning. Some of the persons implicated initially will cooperate and provide other names and evidence.”

He then added the only certainty in these uncertain times for college basketball: “This could go on a long time.”

Related college basketball coverage from Yahoo Sports:
FBI probe uncovers massive NCAA corruption scandal
Louisville fires Pitino, AD in wake of FBI investigation
Dan Wetzel: This is just the tip of a horrible iceberg for NCAA
Why those involved in NCAA scandal will flip for FBI
How the FBI finally caught the NCAA’s biggest cheaters