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U of L Linked To National Recruiting, Apparel Corruption Scandal

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This post has been updated.

Federal investigators announced charges Tuesday in a wide-scale corruption scheme in college basketball.

Federal court documents implicate university and amateur coaches, officials with Adidas and sports money managers.

Court documents imply that the University of Louisville was part of the investigation, which includes a secretly recorded meeting in which one university coach allegedly discusses illegal payments to a recruit’s family.

U of L's interim president, Gregory Postel, confirmed the school's involvement in a statement released Tuesday afternoon.
"Today, the University of Louisville received notice that it is included in a federal investigation involving criminal activity related to men’s basketball recruiting. "While we are just learning about this information, this is a serious concern that goes to the heart of our athletic department and the university. U of L is committed to ethical behavior and adherence to NCAA rules; any violations will not be tolerated. "We will cooperate fully with any law enforcement or NCAA investigation into the matter."
David Grissom, chair of U of L's board of trustees, was not available on Tuesday, according to an assistant. A voicemail left with a spokesman for Papa John's founder John Schnatter -- a booster of U of L athletics and trustee -- was not returned.

Read the documents here.

The Court Case

In all, four college basketball coaches, three sports managers and three employees of a major sportswear company, were charged in federal court in Manhattan.

The investigation revealed the “dark underbelly of college basketball” where coaches, managers and sportswear companies “exploited the hoop dreams of students from around the country,” said Joon H. Kim, the acting U.S. Attorney for the Southern District of New York.

“The defendants’ alleged conduct not only sullied the spirit of amateur athletics, but is showed contempt for the thousands of players and coaches who follow the rules and play the game the right way," said Kim.

A top Adidas official is accused of funneling money to high school recruits to attend universities sponsored by the company.

Ten people were charged in Manhattan federal court. Four coaches -- Chuck Person of Auburn University, Emanuel Richardson of the University of Arizona, Tony Bland of the University of Southern California and Lamont Evans of Oklahoma State -- were in federal custody and expected to make court appearances later today.

'University 6' -- University of Louisville

The federal complaint cites a "University 6," and describes a Kentucky Division 1 athletics program with the exact number of students enrolled at U of L. The complaint describes two scenarios where an Adidas staffer secured payments for families of university recruits.

In one instance, an Adidas employee arranged for $100,000 and ongoing monthly payments that was allegedly funneled through a third-party company for a high school player, who is currently a freshman athlete at the school.

In another instance, the defendants and a coach discuss securing support for the family of a high school student who would ultimately commit to the coach's school.

In wiretapped conversations recorded in June, the defendants described "University 6" as a “flagship school” they needed to take care of with top players.

"This is kind of one of those instances where we needed to step up and help one of our flagship schools in [University 6], you know, secure a five star caliber kid," one affiliate of the shoe company allegedly said in a phone call recorded by the FBI. "Obviously that helps, you know, our potential business."

U of L's Relationship With Adidas

U of L has among the most lucrative of Adidas’s sponsorship contracts. Athletic director Tom Jurich last month announced a $160 million contract renewal that spans 10 years.

“When we began our relationship with Adidas nearly 20 years ago, we weren’t in the same shape we are now,” Jurich said in a news release at the time. “Adidas has stood arm-in-arm with us through adversity and success.”

University Coaches

The federal complaints link two "University 6" coaches to the scheme, but don't identify them by name.

One -- an assistant coached identified as "Coach 1" -- talked directly with Adidas reps and others about getting support for a recruit. The vaunted high school athlete was a top ten player in the country expected to graduate high school in 2019.

One secretly recorded meeting -- between the coach, two defendants, an undercover agent and a cooperating witness -- took place in a Las Vegas hotel room.

"We gotta be very low-key," the coach allegedly said, noting the school was on NCAA probation.

In this conversation, the men discussed another coach, identified in the federal complaint as "Coach 2." This coach was described as a staffer with significant influence at the shoe and apparel company.

In a conversation about whether the company would continue to pay a high school recruit's family going forward, one of the defendants allegedly said, “no one swings a bigger **** than (Coach 2)” at Adidas, saying all he had to do was “pick up the phone and call somebody.”

Cooperating Witness 1

The complaint repeatedly cites a cooperating witness, someone who has been working with federal investigators since 2014. That person isn’t named, but the complaint said the person settled civil charges with the Securities and Exchange Commission on May 6, 2016.

On that day, the SEC announced it filed fraud charges against Pittsburgh, Penn.-based financial adviser Louis Martin Blazer III.

He was accused of taking money without permission from the accounts of several professional athletes in order to invest in movie projects and make Ponzi-like payments, according to the SEC.

The SEC alleges that Blazer, who founded Blazer Capital Management as a "concierge" firm targeting professional athletes and other high-net worth individuals as clients, took approximately $2.35 million from five clients without their authorization so he could invest in two movie projects.

Blazer agreed to settle the charges without admitting or denying the allegations. Federal court records show he also pleaded guilty last month to federal charges of securities fraud, wire fraud, aggravated identity theft, and making false statements pursuant to a cooperation agreement with the government.

Coach Rick Pitino Reacts

U of L's basketball coach, Rick Pitino, released a statement Tuesday evening through his attorney. The statement read:
"These allegations come as a complete shock to me. If true, I agree with the U.S. Attorneys Office that these third-party schemes, initiated by a few bad actors, operated to commit a fraud on the impacted universities and their basketball programs, including the University of Louisville. Our fans and supporters deserve better and I am committed to taking whatever steps are needed to ensure those responsible are held accountable."

Pitino On Adidas And Recruiting

Pitino previously said he’d like shoe companies to get out of the recruiting business.

"Adidas has never one time gotten me a basketball player in my 15 years here,” Pitino said in a May 2016 press conference. “Nike or Under Armour, they will -- not do anything wrong -- but when those players go to those camps you know what schools are Nike schools and Under Armour schools and they go after. Adidas is just not like that. They don't promote their schools to recruits. They just don't do that. Maybe it's more because they are more of a European outfit. Adidas has never one time directed a player my way. And I never once asked them to help."

Pitino later joked in the news conference about recruiting.

"Yeah, I'd like some players sent my way," he said sarcastically. "Nah. Like I said this a few years ago. I'd like to get the shoe companies out of the recruiting business completely. I don't think kids should choose schools based on shoes."

Adidas paid Pitino $2.25 million in 2015 in athletically related income, according to a March USA Today review of a disclosure document that he and other Division I college sports staffers filed.

NCAA Responds

Late Tuesday afternoon, NCAA president Mark Emmert responded to the allegations in a message posted to Twitter:
"The nature of the charges brought by the federal government are deeply disturbing. We have no tolerance whatsoever for this alleged behavior. Coaches hold a unique position of trust with student-athletes and their families and these bribery allegations, if true, suggest an extraordinary and despicable breach of that trust. We learned of these charges this morning and of course will support the ongoing criminal federal investigation."
-- Staff reporters Kate Howard, Rick Howlett, Kyeland Jackson and Eleanor Klibanoff contributed to this report. 

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