- 10 people are arrested and accused of fraud and corruption in the "dark underbelly of college basketball"
- Charges include bribing athletes to persuade them to work with certain advisers and attend specific schools
(CNN)The FBI has arrested 10 people, including college basketball coaches and high-level apparel company employees, in connection with an alleged widespread college basketball scheme.
The United States Attorney's Office in New York filed three complaints that allege fraud and corruption in the "dark underbelly of college basketball," acting US Attorney Joon H. Kim said Tuesday at a news briefing.
Four college assistant and associate coaches -- Chuck Person, Lamont Evans, Tony Bland and Emanuel Richardson -- employed at Division I schools with top-tier basketball programs, have "abused the trust" placed in them by players and families, according to the complaints.
They have been charged with wire fraud, bribery, travel act, and conspiracy offenses. According to the complaint, the coaches facilitated and received bribes from athlete advisers, including business managers and financial advisers Christian Dawkins and Munish Sood, over multiple instances, in exchange for directing and pressuring players and their families to retain the services of these advisers.
In a second scheme, the complaints allege that the athlete advisers and individuals affiliated with major athletic apparel company Adidas paid bribes directly to student athletes and their families. The money paid was in exchange for the athlete's commitment to attend a specific university sponsored by the company, and an agreement to ultimately be represented by the "bribe-payers" once they enter the NBA.
"All of those charged today contributed to a pay-to-play culture that has no business in college basketball," Bill Sweeney, assistant director in charge of the FBI's New York division, added at the briefing.
The bribed coaches showed little regard to the players' interests, ignoring "red flags and seeing only the green of the cash bribes flowing their way," Kim said.
He provided as an example an adviser who was charged with securities fraud last year and was not reviewed for his qualifications and track record by the coaches before they introduced him to the players.
Defendant Jim Gatto, the director of global sports marketing for basketball at Adidas, secretly funneled cash to the families of high school recruits and disguised those payments in the company's books, according to Kim, who would not name the company.
In a statement, Adidas said it had become aware on Tuesday that federal investigators arrested an employee, and that the company is learning more about the situation. "We're unaware of any misconduct and will fully cooperate with authorities to understand more," an Adidas official said.
As part of the investigations, undercover agents and wiretaps were used. Kim quoted coach Bland telling managers and advisers he can "definitely mold players and put them in the lap of you guys," and Merl Code, a business affiliate of Adidas and its high school and college basketball programs, according to the court documents, saying "it's on the books, but it's not on the books for what it's actually for."
The different schools are the main victims of this scheme, Kim said. Coach Person, who also played and coached in the NBA, is employed by Auburn University, which stated it was "saddened, angry and disappointed" and has suspended Person without pay effective immediately.
The University of Arizona had also immediately suspended assistant coach Richardson, and stated it is "appalled to learn of the allegations as they do not reflect the standards we hold ourselves to and require from our colleagues." The school's planned men's basketball media day, previously scheduled for Wednesday, has been postponed.
Oklahoma State University, employer of coach Evans, and University of Southern California, where coach Bland works, expressed their shock and surprise at the allegations. Both universities said they hold their athletic programs to high standards and pledged to cooperate with the investigation.
The University of Louisville has also confirmed it received notice of being included in the federal investigation. It is one of 94 Adidas NCAA schools listed on the company's website.
NCAA President Mark Emmert issued a statement suggesting a "despicable breach" of trust by the implicated coaches. "The nature of the charges brought by the federal government are deeply disturbing. We have no tolerance whatsoever for this alleged behavior," he said.
CNN's Kristina Sgueglia, Janet DiGiacomo, Danielle Wiener-Bronner, Chris Liakos, David Close and Tina Burnside contributed to this report.