Bribery scandal rocks the NCAA

By Joseph M. Hanna published on 29 September 2017

September 28 2017

Federal investigators in New York arrested ten individuals and then publicized three complaints on Tuesday, September 26, 2017 that depict a thriving black market for teenage athletes and “the dark underbelly of college basketball.” The covert probe began in 2015, when a fallen financial adviser agreed to wear a wire for the FBI. Calls and meetings were wiretapped, and coaches unknowingly talked to undercover agents posing as financial advisors.

One scheme involved four NCAA assistant basketball coaches at schools in the “Power 5” conferences of college sports who solicited and accepted bribes from financial advisers, and in return promised to persuade players to send business to those financial advisers once the players turned professional. One coach charged was Chuck Person from Auburn University, who is accused of accepting a total of $91,500 and passing on $18,500 to the families of two athletes. Person was quoted by prosecutors as telling one player: “The most important part is that you … don’t say nothing to anybody … don’t share with your sisters, don’t share with any of the teammates, that’s very important ’cause this is a violation … of rules. But this is how the NBA players get it done.” All four coaches have been suspended.

The other scheme involved efforts to secretly funnel money from Adidas to three players and their families in exchange for the players’ commitments to play at two Adidas-sponsored college programs and to later sign sponsorship deals with the company once they turned pro. Jim Gatto, a top Adidas executive, has been accused of paying $100,000 to an “all-American high school basketball player” so the player would attend University at Louisville, which has an apparel contract with Adidas.  Court documents did not name the schools but contained enough information to identify them. Louisville is already on NCAA probation over a sex scandal.  The FBI recorded a meeting at which a Louisville assistant coach said “[w]e gotta be very low key.”

NCAA President Mark Emmert learned of the charges Tuesday morning and stated he would support the ongoing criminal federal investigation, explaining “[w]e have no tolerance whatsoever for this alleged behavior. Coaches hold a unique position of trust with student-athletes and their families and these bribery allegations, if true, suggest an extraordinary and despicable breach of that trust.” Acting U.S. Attorney Joon H. Kim added that, “[t]he picture of college basketball painted by the charges is not a pretty one….managers and advisers [are] circling blue-chip prospects like coyotes.” The complaints indicated that was what was alleged may just be the tip of the iceberg.

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About the Author

Joseph M. Hanna

Joseph M. Hanna

Joseph Hanna is a partner of Goldberg Segalla and concentrates his practice in commercial litigation with a focus on sports and entertainment law and retail, hospitality, and development litigation. Joe represents sports franchises, professional athletes, and movie studios with various issues related to licensing, contracts, and day-to-day management. He serves as Chair of Goldberg Segalla’s Sports and Entertainment Law Practice Group and editor of the firm’s Sports and Entertainment Law Insider blog. In addition, Joe is the Chair of Goldberg Segalla's Diversity Task Force. He possesses an AV rating from Martindale-Hubbell.
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