Jim Gatto, the director of global sports marketing at Adidas, was arrested by the FBI as part of a bribery scheme. Gatto was charged with paying elite high school basketball players and their families up to six-figure sums to go to Adidas-affiliated colleges with promises to later sign with Adidas if they turned pro.
The charges were outlined in a federal criminal complaint. Nine other individuals also face federal criminal charges, including four assistant basketball coaches, as well as financial advisors and managers, according to the Department of Justice. Media reports have reported that the coaches are from Auburn University, University of Arizona, Oklahoma State University, University of Southern California and University of Louisville.
Said Adidas in a statement, “Today, we became aware that federal investigators arrested an Adidas employee. We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”
Gatto was assisted in the scheme by Merl Code, who recently left Nike for Adidas.
The payments were brokered by three men: Munish Sood, chief executive of financial advisory company Princeton Capital; Christian Dawkins, a business manager; and Jonathan Brad Augustine, who runs an Adidas-sponsored AAU basketball team. The payments were made with the promise that the players sign agreements with Dawkins and Sood once they turned professional.
Among the charges was that Gatto, Dawkins and Sood funneled a payment of $100,000 to the family of a high school basketball player in exchange for the player committing to an unnamed university. In return, the player agreed to retain the services of Dawkins and Sood, while agreeing to sign with Adidas once the player turned pro, according to the complaint. A separate charge described a similar scheme involving a $150,000 payment to another player.
Acting Manhattan U.S. Attorney Joon H. Kim said in a statement, “The picture of college basketball painted by the charges is not a pretty one – coaches at some of the nation’s top programs taking cash bribes, managers and advisors circling blue-chip prospects like coyotes, and employees of a global sportswear company funneling cash to families of high school recruits. For the ten charged men, the madness of college basketball went well beyond the Big Dance in March. Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country, treating them as little more than opportunities to enrich themselves through bribery and fraud schemes. The defendants’ alleged criminal conduct not only sullied the spirit of amateur athletics, but showed contempt for the thousands of players and coaches who follow the rules, and play the game the right way.”
FBI Assistant Director William F. Sweeney Jr. added: “Today’s charges detail a corrupt practice in which highly rated high school and college basketball players were steered toward lucrative business deals with agents, advisors, and an international athletics apparel company. As alleged, NCAA Division I and AAU coaches created a pay-to-play culture, agreeing to provide access to their most valuable players while also effectively exerting their influence over them. Today’s arrests should also serve as a warning to those who conduct business this way in the world of college athletics.”
Photo courtesy Adidas
