RALEIGH, N.C. (WTVD) — Three athletic apparel executives are facing new charges in connection with an FBI probe into college basketball.
A new indictment alleges three Adidas executives defrauded four universities — including the University of Louisville, the University of Miami, the University of Kansas, and North Carolina State University.
According to the indictment, Jim Gatto and Merl Code conspired to funnel payments to the families of high school players in connection with the players’ commitments to play at the schools, with the expectation that the players would later sign endorsement deals with Adidas upon turning professional.
A grand jury charged Gatto, Code and Christian Dawkins with conspiracy to commit wire fraud and wire fraud
Prosecutors say an Adidas representative agreed to pay $90,000 to the family of a Kansas recruit and $40,000 to a recruit at North Carolina State, namely Dennis Smith Jr.
Prosecutors claim money helped secure the players’ commitments to play college basketball at the schools and ensured the North Carolina State recruit signed an Adidas sponsorship deal when he entered the NBA. He entered the draft last June.
Smith has previously denied accepting any money through any channels.
In the Kansas case, the student-athlete made a surprise announcement last August to attend the school.
N.C. State said it will “continue to cooperate fully with the U.S. Attorney’s Office and keep the NCAA updated throughout this investigation.”
No current N.C. State staff members or players are involved in this investigation.