MANHATTAN (CN) — Affirming a trio of convictions stemming from the FBI’s probe of college basketball recruiting corruption, the Second Circuit on Friday rejected the defense of three college sports insiders who insisted universities are ubiquitously engaged in “an all-out arms race” to secure top sports talent without regard to the rules.
In 2018, former Adidas executive James Gatto, ex-business manager Christian Dawkins and former amateur league coach Merl Code Jr. were all found guilty of participating in a “pay-to-play” pipeline of cash payments funneled from Adidas through intermediaries to families of high school student-athletes.
Though attorneys for the men admitted to numerous NCAA violations throughout that three-week trial, they maintained no actual crimes were ever committed and argued the government had not made plausible cases for any specific intent to defraud the universities that gave athletic scholarships to the recruits.
Repeating those arguments on appeal to the Second Circuit, they insisted the payment scheme was intended to help the universities and apparel companies, not defraud them, by bringing top recruits to ensure winning basketball programs.
Whether it is indeed commonplace for professionals in the college sports world to attend certain universities, however, the Second Circuit proved unpersuaded Friday that this should let the three men off the hook.
“The ends, however, do not justify the means, and that others are engaging in improper behavior does not make it lawful,” U.S. Circuit Judge Denny Chin wrote for a three-judge panel, affirming the convictions.
“Here, as the jury could have reasonably found, Defendants deprived the Universities of property — athletic-based aid that they could have awarded to students who were eligible to play — by breaking NCAA rules and depriving the Universities of relevant information through fundamentally dishonest means,” the 58-page opinion states.
The Second Circuit panel demurred at commenting on the business end of the $1 billion NCAA college sports industry, which requires that all student-athletes must remain uncompensated amateurs to be eligible to compete for their schools.
“Instead, our task is to determine whether the government proved beyond a reasonable doubt that Defendants knowingly and intentionally engaged in a scheme, through the use of wires, to defraud the Universities of property, i.e., financial aid that they could have given to other students,” the opinion states. “We conclude that the government did.”
The Second Circuit also rejected their argument that expert testimony and other defense evidence had been erroneously excluded at trial.
“It is even possible, as defendants' expert would have suggested, that a cost-benefit analysis would reveal that universities come out net-positive when they commit recruiting violations,” the opinion states. “But this does not help defendants. The law is clear: a defendant cannot negate the fraud he committed by wishing that everything works out for his victim in the end."
Judge Chin was joined on the panel by fellow Obama appointees U.S. Circuit Judge Gerard Lynch and U.S. District Judge Paul Engelmayer, who was sitting by designation.
In a partial dissent, Judge Engelmayer noted that he would have rejected some charges on the grounds that the trial court unjustly disqualified
Certain evidence the defendants wanted to show jurors.
Two years ago, U.S. District Judge Lewis Kaplan sentencedGatto to nine months in prison, and ordered six-month sentences for both Code and Dawkins. The three sentences were shorter than the government’s recommendation of a minimum of one year for Gatto and a minimum of eight months each for Code and Dawkins.
Dawkins and Code were additionally convicted in a related second trial in May 2019.
In that trial, U.S. District Judge Edgardo Ramos sentenced Code to three months in prison, while Dawkins was sentenced to a year and a day.
More than two dozen universities were embroiled in the hoops scandal; Duke, Oregon, North Carolina State, Creighton and Texas were among the schools mentioned in testimony during a 2018 trial.
Other defendants arrested in the federal “hoops scandal” probe pleaded guilty to charges or cooperated with prosecutors rather than go to trial. Among them, four former assistant basketball coaches pleaded guilty to bribery conspiracy.
“I don’t think anything is wrong with paying players,” Dawkins testified during the second trial. “Everybody was paying players.”
Last month, the Supreme Court agreed to look at an injunction that lets players rake in unlimited funds, so long as they relate to their studies.
Four years after the high court declined to hear a watershed case on compensating college athletes, the justices took up the appeal in December 2020 without comment, as is their custom, consolidating separate cases led by former West Virginia running back Shawne Alston.
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