It’s no secret some college athletes get improper benefits.
Several programs have been hit with crippling sanctions over the years as a result.
But this latest wide-spread scandal could be the neutron bomb that shakes up college athletics for good.
An extensive FBI investigation into fraud and corruption in college athletics has ensnared several marquis programs, and the details are just beginning to seep out.
On Tuesday, the FBI announced that 10 people, including four college basketball assistant coaches, were arrested as part of a three-year investigation into bribes and other corruption in the sport.
On May 6, 2016, Louis Martin “Marty” Blazer III, a Pittsburgh-based financial adviser, was charged by the Securities and Exchange Commission with wire fraud and accused of siphoning $2.35 million from the accounts of several professional athletes in order to invest in movie projects and make Ponzi-like payments.
U.S. Department of Justice documents released Tuesday indicate Blazer also was accused of a 14-year-long wire fraud scheme in which he made “payments and loans to NCAA athletes in order to induce those student-athletes to retain the defendant as a financial advisor and/or business manager.”
Blazer also agreed to one other condition as part of his plea agreement: he became a cooperating witness for the FBI, providing information which sparked the investigation into the relationship between college basketball coaches, financial advisers, sports agents, marketing officials and apparel company employees in recruiting NBA-bound players.
After [a] mutual friend had introduced [a middleman] to Blazer, during a series of phone calls in the fall of 2016, [the middleman] told Blazer that Auburn assistant coach Chuck Person needed money. “In exchange for such money, Person would agree to steer student-athletes to [Auburn’s] basketball team to retain [Blazer’s] financial advisory and business management services,” according to the complaint.
Person, who is Auburn’s all-time leading scorer and helped the Tigers reach three straight NCAA tournaments, was the No. 4 pick of the Indiana Pacers in the 1986 NBA draft. He was the 1987 NBA Rookie of the Year and played for five teams from 1986 to 2000, earning more than $23 million in salary.
According to a phone call that was intercepted by an FBI wiretap on Dec. 17, Person told [an] unidentified player’s mother that her son “is going to be good enough to go first round. I’ve talked to a bunch of people … and I want him to leave to play in the NBA.”
Person told her that he had a financial adviser he wanted her to work with and that Blazer had worked as his adviser, as well as former Auburn star Charles Barkley’s adviser, neither of which was true. Finally, according to the FBI, Person told the player’s mother that he wasn’t “getting anything” for making the connection.
Person also told the player’s mother that Blazer would start giving her $5,000 or so per month, “so that way, you don’t have to worry about anything.”
On Dec. 18, after the Tigers defeated Mercer 76-74 at home, Blazer met with the player’s mother and stepfather at Person’s house. Person explained to them how the arrangement would work and explained that they didn’t have to sign anything.
“Your word is good enough for him, and your word is good enough for me,” Person told them. “When [the player] gets drafted in June then they’ll make a formal signing to be a financial adviser. Now, he is not an agent, so he can’t do any contracts. So when [the player] starts getting paid, what percentage of money you’re going to send to [Blazer] for him to invest is going to be up to you guys. But [the player] should invest a large portion of it, if not all of it, and, uh, you shouldn’t work with more than one financial agent.”
Hearing coaches and handlers callously bilk impressionable kids and their families is cringe-worthy.
The scandal brought down the scandal-plagued – and two-time championship coach – Rick Pitino, who was put on administrative leave pending Louisville resolving how to settle the remaining financial obligations under his contract.
The article continued:
On June 15, the NCAA Division I Committee on Infractions announced that it was suspending Louisville basketball coach Rick Pitino for five games this season, and ordering the Cardinals to vacate all records from December 2010 to June 2014 as a result of an investigation into the program’s high-profile escort scandal. According to Louisville, it would have to forfeit 108 regular-season wins and 15 NCAA tournament victories, including the 2013 national title.
On July 10, less than a month after the NCAA penalties were announced and about a month before the university appealed what it called “draconian” sanctions, an unidentified Louisville assistant coach spoke on the telephone with Merl Code, a former Clemson basketball player and Adidas employee; Munish Sood, a financial adviser from Princeton, New Jersey; and an undercover agent, who was recording the call for the FBI. The men discussed how they were going to mask an initial $25,000 payment from Adidas to the father of a high school player who had recently committed to Louisville.
According to the FBI complaint, James “Jim” Gatto, Adidas’ head of global sports marketing who had worked at the company for 24 years, and Christian Dawkins, formerly an agent for ASM Sports who was recently fired for racking up $42,000 in Uber charges on an unnamed NBA player’s credit card, and the others had previously agreed to funnel $100,000 to the recruit’s father in four payments. Dawkins told the others he was paying the player’s father at the request of a Louisville coach.
After Gatto and Code had problems in obtaining the rest of the money from Adidas, Dawkins arranged a meeting with Jonathan Brad Augustine, president of The League Initiative and program director of the Adidas-sponsored 1 Family AAU program in Florida, at a hotel room in Las Vegas on July 27. The undercover agent, the Louisville assistant and Blazer, the disgraced former financial planner, also were there. Prior to the meeting, the FBI placed video cameras inside the room and recorded the meeting.
During the meeting, Dawkins laid out plans to funnel money to the family of a second player, who was scheduled to graduate from high school in 2019. “The mom is like, ‘We need our [expletive] money,'” Dawkins said. “So we got to be able to fund the situation … We’re all working together to get this kid to [Louisville]. Obviously, in turn, the kid will come back to us.”
When Dawkins mentioned they’d have to be careful because the Cardinals were already on NCAA probation, the Louisville assistant agreed. “We gotta be very low key,” he said.
“If we take care of everybody and everything is done, we control everything,” Dawkins boasted to an undercover agent. “You can make millions off of one kid.”
On Tuesday, interim Louisville president Gregory Postel confirmed the university had received notice that it is included in the federal investigation. “While we are just learning about this information, this is a serious concern that goes to the heart of our athletic department and the university,” Postel said. “UofL is committed to ethical behavior and adherence to NCAA rules; any violations will not be tolerated.”
In a separate statement, Pitino said he was unaware that one of his assistant coaches was involved in the scheme.
“These allegations come as a complete shock to me,” Pitino said. “If true, I agree with the U.S. Attorney’s Office that these third-party schemes, initiated by a few bad actors, operated to commit a fraud on the impacted universities and their basketball programs, including the University of Louisville. Our fans and supporters deserve better and I am committed to taking whatever steps are needed to ensure those responsible are held accountable.”
Whether or not Pitino was involved in the malfeasance is immaterial at this point. On the heels of the previous scandal nobody will believe he was completely ignorant of the fact he—at the very least—had nefarious characters on his coaching staff.
It seems the fallout of this deep FBI probe is just beginning. Other big-name programs will likely be sullied in the process. Fans of those teams can only hope their coaches get the benefit of the doubt Pitino has undoubtedly lost.