The comment immediately before yours answers that. Read what Krystkowiak and Boyle said in that article.
This is what the FBI and prosecutors are investigating: Players receive these bribes, paid with shoe-company money, only to play for teams that are the shoe company's most-favored programs. Nike and adidas are using this covert cash to steer potential one-and-done basketball players to Louisville, Arizona, North Carolina, Miami, USC, etc. Every other team doesn't benefit from the shoe-company handouts to players, their families, and cooperative assistant coaches.
The potential victims are the 300 or so D1 teams who don't have the resources to compete for the players being paid....The other D1 teams are supposed to play for the same "National Championship" without the ability to recruit the players necessary to have a chance to win....As a result, these other schools don't get as big a share of the NCAA pot which further hampers them from competing fairly....It has a snowball effect....
Aware of Krystowiak's grumblings, with which I generally agree.
Just not sure about the criminality of all this. Utah has less of a chance to win an NCAA Championship than say, Louisville, because Louisville is paying a kid who would never go to Utah in the first instance, and the US Attorney needs to spend two years investigating and then prosecuting? At its core it is really just an NCAA compliance issue - and they don't do a very good job of it.
Here is a good read:
September Madness: Problems With NCAA Corruption Case By Randall EliasonOctober 6, 2017, 1:30 PM EDT
Randall Eliason
On Sept. 26, the U.S. Attorney's Officefor the Southern District of New York announced with great fanfare that the office had filed charges against ten individuals in a fraud and corruption case involving college basketball. Acting U.S. Attorney Joon H. Kim outlined the charges against four National Collegiate Athletic Association Division Icoaches, a senior executive at Adidas, and five others. A chart in the press release[1] noted that each defendant faces a maximum of between 80 and 200 years in prison.
The charges are the result of a two-year investigation that involved wiretaps, a confidential cooperating witness, and FBI undercover agents. The three criminal complaints outline two different corruption schemes. Although the complaints name several universities as the victims of these schemes, there is no allegation that any university actually lost any money or property. There are no claims that any of the student athletes or their families were financially harmed. The public was not harmed in any way.
But the defendants did violate NCAA rules. Those rules require that student athletes be amateurs and prohibit them from receiving any outside compensation. The rules also prohibit coaches from facilitating any contacts between athletes and outside agents or receiving any outside compensation for acts related to their athletes. These rules violations (which were, of course, created by the undercover investigation itself) exposed the universities to potential financial penalties and sanctions from the NCAA. That exposure is what's at the heart of the prosecution. The government's case effectively takes the rules of the NCAA, a private nonprofit corporation, and leverages violations of those rules into federal felony charges.
There's no doubt the behavior of the defendants was deplorable. But are criminal sanctions exposing them to decades in prison the proper remedy? I'm not saying the charges are legally flawed not all of them, anyway. But I do question whether this case represents a good use of two years of the time and resources of the agents and prosecutors involved. And I question whether bringing multiple felony charges on these facts is sound exercise of prosecutorial discretion.
At the U.S. attorney's press conference,[2] the very first question was from a reporter who asked (I'm paraphrasing), "It seems like everyone involved was actually benefiting financially. Who's the victim here?"
It's a good question.
The Complaints
The Coach Bribery Scheme
The coach bribery scheme is charged in two separate criminal complaints. The first complaint[3] charges three coaches: Lamont Evans, an assistant coach at Oklahoma State University and former assistant coach at the University of South Carolina; Emanuel Richardson, an assistant coach at the University of Arizona; and Anthony Bland, an associate head coach at University of Southern California. It also charges Christian Dawkins, an employee of a sports management company that represents NBAbasketball players, and Munish Sood, a financial adviser.
The complaint alleges that the three coaches accepted cash bribes from Dawkins and Sood. The total amount of the bribes ranged from about $13,000 to about $22,000. In return, the coaches agreed to introduce student athletes to Dawkins and Sood and to encourage the athletes to hire Dawkins and Sood once the athletes left college and began playing in the NBA. The deals were brokered by another former financial adviser, Marty Blazer. Blazer, who was facing securities fraud charges of his own, was cooperating with the FBI and recording many of the meetings and phone calls. The complaint also charges that the defendants made improper payments to student athletes and concealed those payments from their universities.
The second complaint[4] related to the coach bribery scheme charges only one coach: Chuck Person, an associate head coach at Auburn University. It also charges Rashan Michel, the owner of a clothing store in Atlanta that specializes in making custom suits for athletes. The basic nature of the scheme is the same: Person allegedly accepted more than $90,000 in bribes from Blazer (the cooperating witness) and Michel. In exchange, Person agreed to introduce student athletes to Blazer and Michel and to encourage the athletes to retain them once they left college. Once again, the complaint also charges that the defendants made improper, undisclosed payments to current student athletes.
The charges in the coach bribery scheme include multiple counts of honest services fraud, bribery, honest services fraud conspiracy, bribery conspiracy, wire fraud conspiracy, and Travel Act conspiracy.
The High School Players Scheme
The scheme set forth in a third complaint[5] involves a conspiracy to pay high school basketball players and their families. The defendants are James Gatto, the global marketing director for basketball at Adidas; Merl Code, an individual identified as affiliated with Adidas and its high school basketball programs; and Jonathan Augustine, program director for an amateur high school basketball program sponsored by Adidas. Also charged in this complaint are Christian Dawkins and Munish Sood, the same sports manager and financial adviser charged in the first complaint of the coach bribery scheme.
The complaint alleges that these defendants conspired to make secret payments to three different high school athletes and their families. In exchange, the families agreed the student would attend particular universities sponsored by Adidas, and that the student would sign deals with Adidas and use the services of Dawkins and Sood after joining the NBA.
The defendants allegedly agreed to pay $100,000 to the family of a top high school graduate from the class of 2017, although apparently only the first installment of $25,000 was actually paid. In return, the student allegedly agreed to attend the University of Louisville. They also allegedly conspired to funnel $150,000 to the family of another high school student graduating in 2018, this time to induce that student to attend what appears to be University of Miami. Unnamed coaches at the two universities also were allegedly involved in the schemes.
The charges in the high school players scheme include wire fraud, conspiracy to commit wire fraud, and money laundering.
Analyzing the Criminal Charges
Bribery and Bribery Conspiracy
The coach bribery scheme complaints charge bribery and bribery conspiracy using three different theories: 18 U.S.C. 666, federal program bribery (applies because the universities receive more than $10,000 a year in federal funds); 18 U.S.C. 1343 and 1346, honest services wire fraud (applies to an employee who takes bribes or kickbacks in breach of a duty owed the employer); and 18 U.S.C. 1952, the travel act (applies to interstate travel to further violations of state bribery law).
Under each statute the bribery theory is basically the same: The outside advisers (or undercover agents posing as outside advisors) paid the coaches to induce them to violate their duties to their university employers by violating NCAA rules, thereby exposing the universities to potential sanctions.
The bribery charges highlight the centrality of the NCAA rules to these complaints. There is no direct harm to the universities, financial or otherwise. This isn't a case where an employee took bribes to disclose trade secrets to a competitor or to award a contract to an unqualified contractor, or took some other step that directly harmed the employer. There is only potential harm, and only because of possible sanctions by the NCAA for violating its rules.
Wire Fraud and Wire Fraud Conspiracy
The wire fraud and wire fraud conspiracy allegations (18 U.S.C. 1343) charge that the defendants defrauded the universities by causing them to pay scholarship money to athletes who were ineligible due to the secret payments that were made to them. The high school players scheme also charges that the universities were defrauded of their right to control their limited scholarship assets and how they would be disbursed. Again, any potential harm results only from the possible violations of NCAA rules and penalties that might result. Paying the scholarships didn't harm the universities because they received the services of the players they wanted in return. The only potential harm would come if the improper payments were discovered and the schools were sanctioned.
Money Laundering
Money laundering charges (18 U.S.C. 1956) appear only in the high school players scheme. The complaint alleges that Gatto and the other defendants tried to conceal the payments going from Adidas to the families by running them through other entities and bank accounts controlled by the defendants and by creating fictitious invoices to cover their tracks.
I think the money laundering charges may be flawed. Money laundering requires that the charged financial transaction involve the "proceeds" of a crime money generated by a completed unlawful activity. If the parents had received the money and then done something with it to disguise where it came from, that might be a laundering transaction involving the proceeds of the bribery scheme. But here the charged transactions appear to involve the money used to pay the bribes themselves. That money is not yet proceeds of the bribe for money laundering purposes. It only becomes proceeds once the bribes have been paid and the money is in the hands of the families.
There are plenty of cases throwing out convictions where prosecutors charged money laundering when in fact the financial transactions did not involve proceeds of a completed crime but represented the underlying criminal activity itself. Unless there are more facts out there that don't appear on the face of the complaint, I believe it's likely the money laundering charges will not survive.
Criminalizing the NCAA Rules
Review of the charges makes it clear that the entire criminal case hinges on violations of the NCAA rules. The only harm to the alleged victims the universities stems from any sanctions that might potentially result from the violation of those rules. Take away the NCAA rules, and there is no criminal case.
As the complaints note, the NCAA rules provide that schools violating the rules may suffer penalties including limitations on post-season play, fines and limitations on the ability to grant scholarships or recruit athletes. But the rules do not suggest that those who violate them may be subject to federal criminal prosecution.
The defendants could be forgiven for thinking that if they got caught violating the rules, the worst that would happen is they would be fired. Maybe the university would come after them to try to recoup any financial penalties. Their careers would certainly be over. But they likely didn't believe that violating the internal rules of a private athletic organization would potentially subject them to decades in federal prison.
Prosecution seems even more questionable when you consider that virtually all of the conduct here likely would be legal if it related to professional athletes. The payments would be called finder's fees or product endorsement deals. The purported criminality stems only from the NCAA's insistence on maintaining the fiction that these athletes are amateurs and that high-level college basketball is actually about college, rather than about big business and providing farm teams for the NBA.
There's a lot of behavior that can be squeezed into white collar violations but where criminal sanctions aren't required. That's where the exercise of prosecutorial discretion comes in. This case is really about the violation of NCAA rules. NCAA sanctions against the offending schools and individuals would be the more appropriate remedy.
The players weren't harmed. Their families weren't harmed. The teams weren't harmed. The public wasn't harmed. The coaches were still coaching, and the games were not affected. The universities were only potentially harmed and only because of the rules of a private organization they voluntarily joined in support of athletics programs that earn them millions of dollars.
And this is where the U.S. Department of Justice chooses to devote its time and attention? Look, I love the DOJ, but I can hear the critics now: "You can crash the entire financial system and no one gets prosecuted. But don't you dare mess with college basketball!"
This year it appears the madness didn't wait until March.
Randall D. Eliason is former chief of the Public Corruption/Government Fraud Section at the D.C. U.S. attorney's office and teaches white collar criminal law at George Washington University Law School. He writes about white collar crime on his blog, www.Sidebarsblog.com, and for The Washington Post.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
At the root, isn't bribery a 'crime' because it creates an 'inefficient market'? (i.e. a victimless crime outside of the market forces - as others have pointed out above). If so, sort of ironic that economic factors are what is behind problems with a game played at an educational institution.
Money corrupts. And even without the bribery, most of the tickets are for alumni and other fans, with student rooting sections allotted few seats and other students seemingly staying home in increasing numbers, at our own educational institution, at least. This is not the game I grew up with, for sure.
Joe Nocera formerly of the NY TImes, has been writing about hypocrisy in college sports for a while.
This is from just after news of the scandal broke, but is a good read, also questions how/why this is illegal and why DOJ pursuing enforcement of NCAA rules.
Money corrupts. And even without the bribery, most of the tickets are for alumni and other fans, with student rooting sections allotted few seats and other students seemingly staying home in increasing numbers, at our own educational institution, at least. This is not the game I grew up with, for sure.
Students are actually "allotted" quite a few seats. They have the lower section along one sideline and potentially the entire section behind one basket. The problem is that they don't come close to filling it. I agree it is different from the 50's, but then pretty much everything is.
What does the part about "this entire journey" even mean: "I'm sorry that these events occurred, obviously," Krzyzewski said. "But sometimes only when something bad happens will people look at change. It's not time for a Band-Aid. It's time for a major overhaul -- of this entire journey, not just our part of it. Our part is the one that is furthest behind, or the one that is not in touch."
Would love to hear more from Coach K about the Marvin Bagley recruitment, and if Coach K was ever concerned if he would go to a non-Nike school (not possible in light of family's relationship with Nike)? Subpoena to Nike could uncover some interesting information in that regard.
What does the part about "this entire journey" even mean: "I'm sorry that these events occurred, obviously," Krzyzewski said. "But sometimes only when something bad happens will people look at change. It's not time for a Band-Aid. It's time for a major overhaul -- of this entire journey, not just our part of it. Our part is the one that is furthest behind, or the one that is not in touch."
Would love to hear more from Coach K about the Marvin Bagley recruitment, and if Coach K was ever concerned if he would go to a non-Nike school (not possible in light of family's relationship with Nike)? Subpoena to Nike could uncover some interesting information in that regard.
Coach K "feigned" yet more "outrage" by suspending three freshmen for an exhibition game against Bowie State today for missing ONE class this past Thursday. Certainly an interesting contrast to UNC players who went an entire semester without attending a single class.
As for Bagley and Nike, we can ignore that he seriously considered Adidas Kansas and UA UCLA and go with the baseless and hopeful speculation that Coach K would sacrifice his reputation to shoe-horn an unqualified kid into the program. I'm sure the 5 titles and endorsements from dozens of current and former NBA players from Kobe to LeBron had nothing to do with it. There's certainly nothing wrong with disliking Coach K or even hoping that he crashes and burns, but let's at least acknowledge that we're in the realm of thoroughly baseless and wild conjecture. That said, if you're convinced that nefarious things occurred here, either ethically or legally, I'd love to make a bet with you.
Coach K one of the all time greats. No dispute. But he's been in the same murky waters as everyone else for many years now.
Bagley a good kid. But common knowledge that he would end up at a Nike school in light of relationships with Nike, and he did. Did Coach K or his staff do anything unseemly to get him to Duke over other Nike schools (Arizona, USC)? Of course not. But I don't think Coach K is as pure as he'd like people to believe. He knows how the game is played.
Coach K one of the all time greats. No dispute. But he's been in the same murky waters as everyone else for many years now.
Bagley a good kid. But common knowledge that he would end up at a Nike school in light of relationships with Nike, and he did. Did Coach K or his staff do anything unseemly to get him to Duke over other Nike schools (Arizona, USC)? Of course not. But I don't think Coach K is as pure as he'd like people to believe. He knows how the game is played.
This is what I've been saying, especially when Dick Vitale came out so outraged about Pitino. These top level coaches know. How can they not? If they don't, then it's almost a deriliction of their duties as head of the program.
True enough, although Bob Knight is, to say the least, a very flawed messenger for that message. Not only because of his own flaws as a coach and a person, but also because of the giant blind spot he has about the recruiting practices of his protege, Coach K.
Reading this makes me chuckle thinking about Sean Miller's "cooperation" at Arizona.
And Bruce Pearl was the assistant at Iowa (under Dr Tom Davis) that got Illinois in all the trouble years ago with Deon Thomas by whistleblowing about Illinois and Chicago HS coaches.
Coach K one of the all time greats. No dispute. But he's been in the same murky waters as everyone else for many years now.
Bagley a good kid. But common knowledge that he would end up at a Nike school in light of relationships with Nike, and he did. Did Coach K or his staff do anything unseemly to get him to Duke over other Nike schools (Arizona, USC)? Of course not. But I don't think Coach K is as pure as he'd like people to believe. He knows how the game is played.
Sorry for the delay in responding to this as I've been out of the country. And i certainly didn't mean to get sidetracked with something non-Cal or Pac-12 related. But ill just say this:
Coach K hates the one and done rule and has openly advocated changes to it. But he's also said it doesnt change the way he recruits. He's long said he looks for 5 elements in a player: talent, intelligence, embracing a family culture, character and a willingness to be coached. That was present in 2010 when he won a title with not a single player that played less than 4 years as it was in 2015 when he had a bunch of OADs. Incidentally, two of those OADs were also on the Academic All-ACC Team (Tyus Jones and Justise Winslow).
The AAU ascendancy and its effect on the kids that come from that have corrupted a lot of the environment in college basketball. But I can say with confidence that none of it changes the way Coach K recruits or runs a team. Especially at this point in his career, he's not willing to do compromising things in the interest of wins. He doesn't need it and it's not part of his character. And the university, frankly, wouldn't stand for it. He's adapted to the unfortunate modern environment but hasn't wavered in what he looks for in players or the culture he tries to instill.
Personally, I hate OAD and the trend of kids reclassifying but that's college basketball today. Coach K doesn't just care about the wins or the money. He cares deeply about the mission of building quality people, not just quality athletes even if he only gets a year with them. I absolutely believe that this is something that matters to him at a fundamental level. It's fair that there are skeptics about things ranging from Bagley to Grayson Allen's punishment to the old Myron Piggie garbage but none of those are things Coach K wouldn't be willing to have an open and honest discussion about. I get that some don't like him and that's fine. That's human nature. But to question his desire to improve the game or to play his role in an ethically sound way is, to me, entirely misplaced.
Great post. Interestingly since Jeff Capel joined Coach K's staff, they have become the new Kentucky. They are now the top recruiting program in the country and it's not even close. They are on pace to have 1-3 OADs each and every year from 2014-2019.
Coach K may not like OADs and hopefully he works hard to change the rule but for right now he and his program are the ones taking the most advantage of the rule.
I don't think the FBI probe is going to go anywhere, either. It will be delayed and stretched out and swept under the rug and forgotten.
I actually disagree here, Tom. The FBI hates to be wrong, and they'll get someone, although perhaps not Enfield, Miller, or Altman.
Agree with Ursa here. No way the US Attorney of the Southern District of Manhattan rolls out the way they did to just let this die. This is just the tip of the iceberg.
The N.C.A.A. ruled on Wednesday that the Auburn star quarterback Cam Newton is eligible to play in the Southeastern Conference championship game despite his father's using a third party to solicit money from Mississippi State "as part of a pay-for-play scenario."
Wow, I had forgotten that scheme. I think the NCAA rules on amateurism are pretty ridiculously outdated, but that completely flaunts it, as does UNC's classroom situation. I don't think the NCAA really cares much about this stuff other than doing what is has to to keep the money flowing. An occasional handclap here or there makes them seem like honest brokers.
Perhaps the FBI will snare someone, but the NCAA isn't going to follow up on it very much. So, one or a few people might lose their jobs, big deal. No change.
Perhaps the FBI will snare someone, but the NCAA isn't going to follow up on it very much. So, one or a few people might lose their jobs, big deal. No change.
Coach K one of the all time greats. No dispute. But he's been in the same murky waters as everyone else for many years now.
Bagley a good kid. But common knowledge that he would end up at a Nike school in light of relationships with Nike, and he did. Did Coach K or his staff do anything unseemly to get him to Duke over other Nike schools (Arizona, USC)? Of course not. But I don't think Coach K is as pure as he'd like people to believe. He knows how the game is played.
Sorry for the delay in responding to this as I've been out of the country. And i certainly didn't mean to get sidetracked with something non-Cal or Pac-12 related. But ill just say this:
Coach K hates the one and done rule and has openly advocated changes to it. But he's also said it doesnt change the way he recruits. He's long said he looks for 5 elements in a player: talent, intelligence, embracing a family culture, character and a willingness to be coached. That was present in 2010 when he won a title with not a single player that played less than 4 years as it was in 2015 when he had a bunch of OADs. Incidentally, two of those OADs were also on the Academic All-ACC Team (Tyus Jones and Justise Winslow).
The AAU ascendancy and its effect on the kids that come from that have corrupted a lot of the environment in college basketball. But I can say with confidence that none of it changes the way Coach K recruits or runs a team. Especially at this point in his career, he's not willing to do compromising things in the interest of wins. He doesn't need it and it's not part of his character. And the university, frankly, wouldn't stand for it. He's adapted to the unfortunate modern environment but hasn't wavered in what he looks for in players or the culture he tries to instill.
Personally, I hate OAD and the trend of kids reclassifying but that's college basketball today. Coach K doesn't just care about the wins or the money. He cares deeply about the mission of building quality people, not just quality athletes even if he only gets a year with them. I absolutely believe that this is something that matters to him at a fundamental level. It's fair that there are skeptics about things ranging from Bagley to Grayson Allen's punishment to the old Myron Piggie garbage but none of those are things Coach K wouldn't be willing to have an open and honest discussion about. I get that some don't like him and that's fine. That's human nature. But to question his desire to improve the game or to play his role in an ethically sound way is, to me, entirely misplaced.
I don't mean to be a jerk, but unless you know the guy personally (which may certainly be possible), everything you're saying is just your opinion based on what you've seen/heard Coach K say in public or through third parties. $7-10 million/year is a massive sum of money and will make people do what's necessary to keep it coming. On top of that there's the addictive nature of winning and respect, which makes people who were once legitimately successful engage in illegitimate acts when there was no good reason for them to do so.
The fact is he's bringing in the top OAD recruits and Duke is known to be one of the top academic institutions. It's just to big of an incongruity to me, and I believe the story will unravel at some point. Remember it's also much easier to hide finances, class records, etc. at a private school.
PTownbear - No, I don't think you're being a jerk and respect anyone's questioning of how things are done at Duke, especially given the fact (that, I suspect, we'd all agree on) that today's college basketball environment if full of shady characters. And no, I don't claim to have a personal relationship with Coach K apart from a few private forums I've been fortunate to attend as a financial contributor and through his involvement with the business school where I graduated from and remain actively involved. Oddly enough, he founded the Coach K Center on Leadership and Ethics at the business school because those topics are important to him personally.
I'll just say this. I believe strongly that we all leave a wake behind us as we progress though life. And that wake is ultimately determined by our character and manifested in the quality of the relationships we have, our accomplishments and what people say about us. When you look at the wake that Coach K has left behind and consider what people close to him say about him (former players, fellow coaches, administrators, USA Basketball, those asssociated with his various charitable causes, even players that competed against him), you'd be hard pressed to find anyone that calls into question his character or how he conducts himself. Most/all of the naysaying comes from the casual fan for whom having a villain is just part of fandom.
His recruiting of OADs makes some people uncomfortable on principle, including me. But he's spoken extensively on the topic and you can read those comments yourself. While a lot of us detest the OAD phenomenon (including Coach K), I can't think of a single player that wasn't worthy of being part of the program (ok, maybe Austin Rivers). Lot a of talk about Bagley? Well, he was a straight A student in HS as a freshman and ended up with a 3.43 GPA. He's a thoughtful, well-spoken and intelligent guy. I have no problems having someone like that playing at Duke even if it's unfortunately for just one year.
Calipari actively markets the Kentucky program as being a ticket to the NBA. That's not even remotely how Coach K markets his program. He's serious about building character, a family environment and development in a holistic sense. That's part of his military background and a big part of his approach to being a coach and a leader. Perhaps that's why a lot of kids (be it a 4 year guy or a 1 year guy) want to play for him and be a part of his program.
One other thing to add PTownbear: I don't mean to make such a stand for Duke and Coach K where I naturally have a bias. Even though a lot of coaches do questionable things, I think there are still a handful of coaches that deserve respect and operate with character, putting right/wrong over Ws/Ls. We were fortunate to have one with Monty. But there plenty others: Beilein at Michigan, Krystowiak at Utah, Bennett at Virgina all seem to be cut from that same cloth and I'm sure there are plenty others.
"We're involved, and it is a process," Pearl said following his team's Monday practice. "But because I don't know the details about what they're involved with, I can't comment."
I actually had no idea Bruce Oearl was now at Auburn and it was his assts who are caught up in this. Too funny.
