MANHATTAN (CN) – After two days of closing arguments in a New York courtroom, the first federal bribery and corruption trial in NCAA basketball history will go to a jury to decide whether an alleged scheme to funnel money from Adidas to families of recruits victimized colleges that sought top players.
During an 80-minute closing Wednesday, Assistant U.S. Attorney Noah Solowiejczyk summarized the government’s case that a “pay-to-play” pipeline of cash payments from Adidas through intermediaries to families of high school student-athletes defrauded the colleges that gave athletic scholarships to the recruits.
Solowiejczyk argued that the defendants – former Adidas executive James Gatto, ex-business manager Christian Dawkins and former former amateur league coach Merl Code Jr. – willfully deceived the universities because the payments to players’ families made those athletes ineligible to compete in NCAA play.
Deliberations in the fraud trial are expected to begin Monday afternoon after closing arguments concluded Thursday morning. The jury is comprised of eight women and four men, none of whom identified themselves as being more than casual fans of college basketball during the selection process.
Attorneys for all three defendants admitted to numerous NCAA violations but each insisted throughout the trial and their respective closing arguments that the payment scheme was intended to help the universities and the lack of specific intent to defraud contradicts the government’s wire fraud and conspiracy counts.
Over the course of the trial that lasted two and a half weeks before U.S. District Judge Lewis Kaplan, the government alleged that Dawkins, Code and Gatto caused economic harm to the universities because the schools could face potential NCAA penalties –
including fines, scholarship losses and postseason bans – for giving athletic scholarships to student-athletes who were ineligible to play because they had received payments from Adidas.
Gatto’s attorney, Michael Schachter, a partner at Willkie Farr & Gallagher LLP, described the payment arrangement Thursday morning as a “win, win, win” situation for Adidas, the universities and the families of the players.
Schachter argued that Gatto’s intent with the arrangement of the payments was to support Adidas-sponsored schools and help their coaches secure the best players, not to defraud the colleges.
“Colleges are aware of and encourage this,” Schachter said of the role of the sports marketing industry in college basketball.
In closing arguments, the prosecution argued instead that Gatto facilitated dirty deals by approving and expediting sham invoices for payments to Code’s amateur basketball team, supposedly for travel expenses. That team then cut checks to Dawkins, purpotedly for consulting fees, who then withdrew cash to pay the family of Brian “Tugs” Bowen to commit to playing for the University of Louisville, according to the government.
The player’s father, Brian Bowen Sr., testified during trial that he used a secret second phone, which he called a "bat phone," to communicate with Dawkins about the Adidas deal.
“These invoices have nothing to do with universities,” attorney Schachter said during his closing regarding Gatto’s Adidas invoices for his discretionary budget, “so they couldn’t deceive universities.”
Prosecutor Solowiejczyk called the sham invoices “devastating evidence that Jim Gatto knew what he was doing was wrong.”
Thursday morning, Merl Code Sr. – the defense attorney for his son, Code Jr., the former amateur coach consultant with Nike and Adidas charged with five felony counts related to attempt and conspiracy to commit wire fraud – claimed the government’s charges are an attempt to take NCAA violations and “magically bundle them into the federal crime of wire fraud.”
Code Sr., a former Grey Cup champion Canadian Football League player himself, insisted that the government has not shown any intent to defraud necessary to prosecute the charges. The government has “attempted to shoehorn NCAA violation into a federal statute… and the shoe does not fit,” Code Sr. told jurors Thursday.
Delivering his 40-minute closings to the New York jury with a thick South Carolina accent and Southern charm, Code Sr. told jurors that “Tugs” Bowen had already been rendered ineligible for NCAA play before the 2017 cash payments because his father accepted payments years earlier.
“You can’t kill a dead man; he was already dead. And Merl shot him again three years later? He was already dead,” Code Sr. analogized.
Bowen Sr. testified earlier this month that Adidas had paid his family $1,500 to $2,000 a month for his son’s his first sponsorship while he was still in high school, playing for the Michigan Mustangs in the Amateur Athletic Union.
Using cash payments to protect universities from NCAA scrutiny is not fraud, Code Sr. insisted Thursday – “that’s just being a good sponsor and business partner.”
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