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Top-tier college basketball programs were thrown into turmoil Tuesday as federal prosecutors unveiled criminal charges against 10 coaches, managers, financial advisors and representatives of sportswear companies including Adidas AG, accusing them of making illicit payments to cash in on the vast riches generated at the sport’s highest levels.

The alleged schemes include illicit payoffs to steer young athletes to powerhouse schools and into clothing contracts and financial advisory deals. Among those charged were current and former coaches at Oklahoma State University, the University of Arizona, the University of Southern California and the University of South Carolina.

Perhaps the most prominent defendant is Chuck Person, a former National Basketball Association star and now associate head coach at Auburn University.

Federal prosecutors in Manhattan said the charges followed a three-year investigation into criminal influence in NCAA basketball. Prosecutors in Manhattan will detail the allegations at a noon news conference. The schools aren’t publicly identified in three complaints unsealed on Tuesday.

The charges include bribery, conspiracy and fraud. Part of the case is built on allegations that an executive at a global apparel company bribed students -- and their families -- to attend universities where the company sponsored athletic programs.

Prosecutors also allege that business managers and financial advisers bribed coaches to steer student athletes to them to manage their fortunes once they turned professional.

An Adidas spokeswoman, Lauren Lamkin, said in a written statement: “Today, we became aware that federal investigators arrested an Adidas employee. We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

Adidas shares dropped on the news, tumbling 2.8 percent at 5:13 p.m. in Frankfurt.

Secret Conversations

The FBI had a cooperating witnesses at a sports advisory firm and its undercover agents secretly recorded conversations and made payments to the accused.

The arrangements were lucrative for all parties and especially advisors, “for whom securing a future NBA player as a client can prove extremely profitable,” according to one of the complaints. “NBA draft picks can and do make tens of millions of dollars over the course of their NBA career, a portion of which they pay to their agents, and a portion of which they invest and have managed through their financial advisers and business managers.”

Along with coaches, the defendants include one agent, a financial advisor and a former referee. Other coaches charged are Lamont Evans, an assistant at Oklahoma State, Emanuel Richardson, an assistant at Arizona, and Anthony Bland, a coach at USC.

Oklahoma State said in a statement Tuesday that it demands “high standards of conduct” in its athletic department and is “cooperating fully” with authorities.

One defendant, sports agent Christian Dawkins, explained to another defendant, financial adviser Munish Sood, that the good thing about lining up coaches was it provided access to "good players every year,” according to one of the complaints. The path to securing commitments from college athletes was through assistant coaches because “the head coach ... ain’t willing to (take bribes) ’cause they’re making too much money. And it’s too risky,” Dawkins said, according to the complaint.

 

Also named in the case are Rashan Michel, owner of an apparel company in Atlanta; James Gatto, the Adidas employee; Merl Code, who is affiliated with Adidas’s high school and college basketball programs; and Jonathan Brad Augustine, program director for an unidentified high school-age basketball team.

This article was provided by Bloomberg News.