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Adidas Executive Accused of NCAA Corruption Flubs Dismissal Motion

Advancing a leg of the sprawling NCAA bribery case from the bench, a federal judge found little basis Thursday to dismiss charges against an Adidas executive.

MANHATTAN (CN) - Advancing a leg of the sprawling NCAA bribery case from the bench, a federal judge found little basis Thursday to dismiss charges against an Adidas executive.

As director of global sports marketing for basketball at Adidas, Jim Gatto is one of 10 coaches, managers, financial advisers and sportswear executives named in a trio of criminal complaints last year over the corruption of college basketball.

Prosecutors say the 47-year-old worked with three other men to “funnel” $100,000 from an unnamed company to the family of an unidentified high school student.

Though defense attorney Michael Schechter suggested that Gatto’s conduct was motivated in some way to help the universities, U.S. District Judge Lewis Kaplan called this argument “naive” Thursday at a hearing.

Whereas the universities stood to suffer penalties if the alleged payment pipeline was uncovered, Kaplan noted that the coaches had financial and reputational stakes in such deals that could be described as “partly, or even entirely … selfish.”

Kaplan said the interests of the schools and coaches would not be completely aligned at a minimum and perhaps even in conflict.

Finding the motion to dismiss Gatto’s indictment “not at all persuasive,” Kaplan concluded that the universities are victims of the conspiracy because they were contracted to provide athletic scholarships to student-athletes who were ineligible to compete as a result of the bribe payments.

Schechter, an attorney with Willkie Farr & Gallagher, also stumbled by asking Kaplan to consider the Seventh Circuit ruling U.S. v. Walters.

Though former NFL agent Norby Walters was convicted at trial of mail fraud, conspiracy and violating federal anti-racketeering law, the Chicago-based federal appeals court ruled in 1993 that Walters could not have formed the suitable intent to defraud the colleges.

Schechter argued that this precedent undercuts the charges against Gatto, but Kaplan encouraged Schechter to drop the point. “The Seventh Circuit does not control my decisions,” Kaplan said.

Kaplan concluded the 40-minute hearing by saying he would render a detailed, written opinion at a later date.

Earlier this week, the U.S. Attorney's Office in New York dropped charges against Jonathan Brad Augustine, the former director of an amateur basketball program in Orlando, Florida.

Accused of conspiring to have two high school players sign with Louisville and one with Miami, Augustine was named as co-defendant with Gatto in the September 2017 indictment.

Gatto remains free on bail with co-defendants Merl Code and Chester Dawkins.

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