Jury finds three defendants in Adidas basketball corruption trial guilty

All three defendants in the Adidas college basketball trial were found guilty Wednesday by a federal jury.

Adidas executive James Gatto, former Adidas consultant Merl Code and former sports agent Christian Dawkins were accused of conspiring to pay the families of players to attend schools sponsored by Adidas, including Kansas.

They were found guilty on all seven counts of wire fraud and conspiracy to commit wire fraud: three for Gatto, two for Dawkins and two for Code. Gatto was the only defendant charged in connection with Kansas; his former associate T.J. Gassnola testified he paid the family of former KU player Billy Preston $89,000 and the guardian of current Jayhawks player Silvio De Sousa $2,500 for online classes.

Sentencing is scheduled for March 5. Gatto’s defense attorney, Michael Schacter, said he will appeal the verdict.

“Of course,” he said.

During the trial, the defense didn’t contest payments were made and NCAA rules were broken, but argued the prosecution didn’t prove that the universities were victims of the payment schemes and no federal laws were broken.

“You don’t want his comment. Just read between the lines,” Dawkins’ mother, Latricia Vaughn Dawkins, said after the verdict was read. “That’s how we feel about it.” An attorney for Dawkins told CBS Sports that he will appeal.

A legal source with knowledge of the trial said the verdict will put pressure on the NCAA and schools to take action. The verdict also could have ramifications for two more trials scheduled for next year.

“I suspect there will be a race to cut deals with the U.S. Attorney’s office now,” the source said. “Plea bargains are very likely for the next set of defendants.”

The jury, composed of eight women and four men, had deliberated since Monday at the Moynihan United States Courthouse.

In instructing the jury Monday morning, Judge Lewis A. Kaplan said “A violation of an NCAA rule by itself is not a violation of a law.” He added the issue was whether “the universities were fraudulently misled about whether an NCAA violation took place.”

KU chancellor Douglas Girod and athletic director Jeff Long issued a joint statement following the verdict that said, in part:

“During the trial, information was presented regarding a former KU student-athlete, a current KU student-athlete, and KU men’s basketball coaches. Some of the information we were aware of, and some is new to us. The new information needs to be evaluated and understood. We have already been in contact with the NCAA regarding trial developments and will continue to work with NCAA staff moving forward.

“Two additional federal trials are set for February and April 2019. Thus, we remain unable to fully comment on the issues before us. By limiting our comments, we are able to protect the integrity of the federal matters and the work of the NCAA.

“While that work continues, we remain fully supportive of our student-athletes, our coaches and our men’s basketball program.”

The KU statement also addressed Kansas’ athletic apparel contract with Adidas, which runs through 2019, and a proposed 12-year, $191 million extension that has not been completed: “While we have made no decision regarding a long-term contract extension with our apparel partner, Adidas, we continue to evaluate our options. There is no timetable for a decision.”

Adidas issued a statement after the verdict that said: “We cooperated fully with the authorities during the course of the investigation and respect the jury’s verdict. We look forward to continuing to work with the NCAA and other stakeholders in a collaborative and constructive manner to improve the environment around college basketball. We have strengthened our internal processes and controls and remain committed to ethical and fair business practices.”

This story will be updated

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