The U.S. Department of Justice hit Adidas executive Jim Gatto with more charges Tuesday, alleging he conspired to pay three more high school basketball stars to attend Adidas-affiliated colleges.
The Oregon resident engineered a $40,000 payment to the father of a former North Carolina State University player and conspired to pay another $90,000 to a the mother of a former Kansas Jayhawks star, federal prosecutors allege in the expanded indictment filed Tuesday in New York. Gatto also allegedly conspired to pay $20,000 to the guardian of a third player in return for agreeing to attend Kansas.
The superseding indictment does not identify the players. But based on information contained in the court filing, the North Carolina State player appears to be Dennis Smith Jr., now a rookie point guard for the Dallas Mavericks.
It’s not immediately clear who the Kansas players are, though some media outlets suggest one is Silvio De Sousa, who committed to Kansas last August.
According to the indictment, Adidas’ plan to pay De Sousa’s guardian was complicated by the fact that another party had already paid him to attend another school. The player evidently returned the money, clearing the way for Adidas to pay his guardian.
De Sousa played for an Under Armour grassroots team and had been considering the University of Maryland, an Under Armour school, when he made the surprise decision to attend Kansas instead.
The case casts an unflattering light on the intersection between private commercial interests and the grassroots basketball world, where high school-age kids compete for the attention of college coaches and coveted scholarships. The Oregonian/OregonLive published a series of stories on this largely unregulated world in March.
The expanded indictment brings the pay-to-play scandal right into the Final Four, the climactic stage of the NCAA’s national championship tournament. De Sousa scored seven points for Kansas in its semifinal loss to eventual national champion Villanova.
Two other defendants, former Adidas consultant Merl Code and agent-in-training Christian Dawkins, were also hit with additional fraud counts. Dawkins worked for controversial sports agent Andy Miller, who has since resigned from the business and is believed by some to be cooperating with federal prosecutors.
Gatto, Code and Dawkins had already been charged with conspiring to pay off the families of players in return for attending the University of Louisville and Miami. They have all pleaded not guilty.
The corruption case has ensnared nine people, including four college assistant coaches. Charges have been dropped against a 10th person, a youth basketball coach.
Gatto, who headed basketball sports marketing, has been placed on paid administrative leave by Adidas. The Wilsonville resident operated out of the German company’s North American headquarters in Portland. Code, who was based in South Carolina, has left the company.
In a statement released Tuesday, Adidas said it “is committed to ethical and fair business practices and to full compliance with applicable laws, rules and regulations. We have cooperated fully with the authorities in the course of their investigation and will continue to do so as this case proceeds.”
Adidas is paying for Gatto’s defense costs. His lawyers could not be reached for comment.
Kansas issued a statement referring to the university as a “victim” in the case. “The indictment does not suggest any wrongdoing by the university,” it said.
For its part, North Carolina State said it will “continue to cooperate fully with the U.S. Attorney’s Office and keep the NCAA updated throughout this investigation.”
Correction: An earlier version of this article misstated how many points Silvio De Sousa scored in Kansas’ loss to Villanova.
— Jeff Manning
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— Brad Schmidt
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