On Nov. 7, Adidas executive James Gatto and consulting contractor Merl Code were indicted on charges of conspiring with university basketball coaches and agents to pay out large sums of money to student athletes who chose to play for particular teams. The indictment, which was released on Wednesday by the U.S. Attorney for the Southern District of New York and first uncovered by ESPN’s Mark Schlabach, outlined the role that Adidas’ head of global sports marketing, Gatto — along with several other high-profile college sports figures — allegedly played in the case. Adidas declined to comment on the indictment.
Here are five key details to emerge from the recent filing.
- Adidas executive James “Jim” Gatto, who oversaw a multimillion-dollar budget for the company’s high school and college basketball program, allegedly “conspired to illicitly funnel approximately $100,000 from [Adidas] to the family of an All-American high school basketball player” to get the student to play basketball for the University of Louisville, one of the company’s supported schools. (While court documents do not list Adidas specifically, they do list Gatto, who was employed by Adidas at the time of investigation.)
- According to the filing, four installments of $25,000 were to be paid out to the father of the athlete via various channels, including a separate organization, external bank accounts and/or sports recruiter Christian Dawkins, according to the court record. Sham invoices were allegedly used for the transactions. Only one payment made it all the way through to the family before Dawkins, Gatto and Code were arrested.
- In a phone call with a coach about the purported $100,000 scheme, Code allegedly said: “This is one of those instances where we needed to step up and help one of our flagship schools […] secure a five star caliber kid.” In another phone call with Dawkins, Code allegedly said that the payment is “on the books, [but] it’s not on the books for what it’s actually for.”
- At a meeting with two university coaches, among others, Dawkins allegedly discussed making payments to recruit another student athlete to Louisville. Part of the purported deal was that the student would also retain Dawkins’ services upon entering the NBA. At the meeting, an envelope with $12,700 was allegedly handed to a coach for delivery to the student’s family, the document detailed.
- U of L head coach Rick Pitino could also be heavily implicated in the case, according to the indictment. Pitino, who lost his Adidas contract and was fired by the school after the FBI started an investigation on the school’s involvement in the purported bribery scandal, has insisted that he knew nothing about the bribery. He has since filed suit against Adidas for emotional distress. Multiple news outlets reported Pitino was the coach listed in the documents as the “Coach 2” of “University 6,” who allegedly called Gatto to request funds to recruit players.