Former prosecutor: KU not in clear yet, but one past case provides hope

Kansas head coach Bill Self takes questions from media members about recent updates involving Kansas in the college basketball bribery case following Kansas basketball banquet on Tuesday, April 10, 2018 at the DoubleTree Hotel in Lawrence.

Even those with courtroom experience in cases involving NCAA corruption are reserving judgment as to what the ramifications will be for the Kansas basketball program from a federal indictment released Tuesday.

The indictment included material alleging that guardians for two members of this past season’s basketball team received payments from an Adidas executive who was steering them to Kansas.

“It's hard to predict whether or not there will be additional information that will come out, either from further investigation, additional cooperation from participants or pretrial disclosure of the case,” said Stephen Hill Jr., a former U.S. attorney and current partner at Dentons in Kansas City, Mo. “But anyone who thinks this is done in a general sense, I think would be incorrect.”

In other words, people shouldn't hypothesize that KU, its coaches and other officials are completely in the clear, yet. But Hill's past work also shows that the university could still emerge from this case relatively unscathed even when it comes to NCAA violations.

In 1998, Hill was on the team that wrote the indictment in a case against former Kansas City-based AAU coach Myron Piggie. That case and the ongoing one from the U.S. Attorney for the Southern District of New York differ in many ways, but share some of the same language: schemes, secret payments, defrauding.

In the case from two decades ago, Piggie was sentenced to 37 months in prison, three years supervised release and ordered to pay more than $320,000 in restitution. And some of the schools who had players involved did face NCAA penalties. But one also did not. Duke largely avoided NCAA penalties because it successfully was able to prove to the NCAA that it did not know of the illegal payments made to one star player.

Thus far, federal prosecutors have not alleged that any KU coach or officials knew of the alleged payments made to the mother and guardian of two KU recruits.

The Piggie case involved direct payments to players. Today’s, at least to this point and as it pertains to KU, is focused on alleged payments made by Adidas executive Jim Gatto and two colleagues to a parent of one KU player and guardian of another.

In both cases, four universities technically were considered victims of fraud, based on illegal payments that compromised the amateur status of the athletes.

Hill said he read the 36-page indictment and explained why it’s obvious to him that not everything the feds have uncovered was included in it.

A Missouri graduate who chairs the U.S. White Collar and Government Investigations practice group, Hill also classified the recent superseding indictment as more than a “bare-bones indictment.”

“They want to put forth as much factual information as necessary to demonstrate that a violation of federal law has occurred, as opposed to trying to convict the defendants of the allegations,” Hill said. “And it's fair to say that they have not come forward with all of their information. You see they use references, but not full identities, for individuals involved in the alleged schemes. That's just one example of how they have held back some of the information.”

Two of those references — “the mother of a top high school basketball player (“Parent-3”)” and “the legal guardian of another student-athlete who was a top-rated high school basketball player (“Guardian-1”) — refer directly to Kansas.

Hill explained that neither the school nor either individual, at this point, was in any legal trouble because the current indictment is simply a case against three defendants: Gatto and Merl Code, of Adidas, and Christian Dawkins, who at various times had run an AAU basketball program and worked for Andy Miller, a player agent. The indictment alleges they defrauded four universities that currently hold sponsorship deals with Adidas.

That language paints KU, Louisville, Miami, Fla., and North Carolina State as victims.

“I did not see anywhere, nor do I believe that we were thought of to be anything other than a victim in the situation,” Kansas basketball coach Bill Self said after Tuesday’s postseason banquet.

According to Hill, that stance by Self and KU is both fairly standard and solid in such scenarios.

“It's not out of line for the University of Kansas and its representatives to point to that indictment and say the legal theory alleges that we were defrauded,” Hill said. “I think that's a perfectly appropriate position to take.”

That's legally speaking. However, Hill conceded that, from a common-sense standpoint, such a claim might not be as widely accepted. He pointed to his experience with the Piggie case as the reason why.

“When we were doing our investigation and speaking with high-profile college coaches, one of them said to us, 'We know the problems that are associated with summer basketball and the connection between those representatives and the colleges and universities that are trying to recruit these kids,'” Hill recalled. “Clearly, since that time period, high-level coaches have been on notice that this is an area that has a high level of risk associated with it.

“I think our indictment put all of college basketball on notice that there was a problem. It was a very high-profile investigation and indictment that I think everyone in college basketball was familiar with. So the notion that schools are caught by surprise by the general problem, I think, is subject to criticism.”

What happens next, however long it may take to come, will be key for KU and any potential eligibility issues that could land in the Jayhawks' locker room as a result of the investigation.

Although neither the player nor his guardian was named, dates in the most recent indictment identifying a player who committed to KU on Aug. 30, 2017, match up with the timeline of freshman Silvio De Sousa's commitment to KU.

De Sousa guardian Fenny Falmagne twice this week told the Journal-World that neither he nor De Sousa ever took money from anyone.

One thing worth noting about the position that a lack of knowledge about the alleged illegal payments could keep De Sousa eligible and also keep KU from having to vacate victories in which De Sousa played — including KU's participation in the 2018 Final Four — is Hill's recollection of one more aspect of the Piggie case 20 years ago.

“It's a sound legal theory that this fraudulent conduct defrauds the universities,” Hill said. “I can't speak for the NCAA and what they'll do here; however, in our case, they visited penalties on individual players and required the schools to come in and explain how they were not aware of the fraudulent conduct.”

Hill indicated that he would be surprised if federal investigators had finished gathering information.

“It's fair to say,” Hill began, “that based on the level of detail in this superseding indictment, as well as the public statements of federal agents, that this is still an ongoing investigation, which means that they continue to try to find every piece of information that either supports these charges or would support additional charges.”

At the end of the Piggie case, which involved blue-blood programs UCLA and Duke, along with Missouri and Oklahoma State, only Duke avoided severe penalties from the NCAA.

In 2004, five years after former Duke star and Piggie prospect Corey Maggette helped lead Duke to the 1999 national title game and after the 1998-99 season was found to be ineligible for accepting money from Piggie, the NCAA ruled that Duke would not be penalized for Maggette's participation.

The reason?

According to a Los Angeles Times article dated April 2, 2004, “the distinction was that Duke was not aware of Maggette's eligibility issue when he played in the Final Four in 1999, despite rumors of improprieties.”

The three other schools involved in the Piggie case each were required to withhold their ineligible players from competition for extended periods.

In addition, the four schools combined, according to court documents, lost nearly $250,000, dubbed “intangible harms to the universities,” which included negative publicity, diminished support from donors, merchandise and ticket sales, and other revenue losses.

As for the current scandal and its impact on KU, one question now is whether Kansas, now that it has become officially tied to the investigation, will be proactive in the manner Duke was 20 years ago or reactive and wait to see what else federal investigators might expose.

Comments

Craig Carson

I would hope KU would be very active about this right now..but the fact that in the case 20 years, none of the 4 schools had to vacate wins..they just had to sit the players..at this point, KU has enough depth next year to sit DeSousa if they have to or if no penalties are dealt out by the NCAA immediately that loss of income and scholarships would be the worst of it..hopefully none of KU's assistants or employees were directly involved

4 months, 1 week ago

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Doug Merrill

This article is written in the fine art of speculative fear-mongering for which we used to have to turn on the TV.

4 months, 1 week ago

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RJ King

Fear mongering??? It's written in the fine art of explaining to the layman, the legalities and outcome of a precedent, at least a similar situation. It calms everyone down with a "wait-and-see, and in the meantime don't-panic tone" if there ever was one.

4 months ago

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Brian Leslie

One sticky issue for KU and Silvio is that the FBI case is not going to wrap up before next season (and possibly for 2-3 years), and they are not handing their case files over to the NCAA. If Silvio is going to have to sit the entire next season because KU is being "proactive," it's probably in his better interests to play professionally. He is 19 years old, but I believe because he will not be one year removed from his high school graduation, he is not NBA eligible, so it would have to be an overseas thing.

As a native Angolan here in the U.S. under the protection of a guardian, it seems extremely unfair to make Silvio sit out or essentially force his hand on quitting school after a single semester if he didn't know anything about the payment (which seems pretty likely; he apparently didn't know about the payment from UA for him to attend Maryland, and it also seems that his guardian wouldn't exactly be anxious to keep Silvio in the loop). I would hope that the NCAA can investigate this over the summer and officially clear Silvio.

There is also the chance that the Adidas guy saying he needed the money pocketed it, and Silvio's guardian never received anything - as he claims. That gets into EXTREMELY unfair treatment of Silvio if he is declared ineligible, or worse, kept in limbo.

The NCAA is there to protect the integrity of the game, but also to protect the athletes. I hope they can find a way to thread the needle on this.

4 months, 1 week ago

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Marius Rowlanski

The NCAA already cleared Silvio. Why bother going through reclassification?
It might take the FBI at their speed of light investigations several years before all this washes out.

Where did this *transaction* even take place? Angola? Getting money from wealthy corporations probably isn't much of a crime back at home.

4 months ago

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Craig Carson

I get where you are coming from, but imagine Silvio being at KU for 3 years and KU making another FF, winning another Big 12 or even winning the NC only for the NCAA to change their mind and make KU forfeit 3 years of games..that would be soul crushing for KU fans..Id rather them either sit him until they know for 100% sure or get something in writing from the NCAA that they wont make KU vacate games no matter what

4 months ago

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Dane Pratt

Only the NCAA would punish the victim of a crime.

4 months, 1 week ago

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Dirk Medema

You've not been paying attention if you actually believe that.

It's happened in these comments, it has happened repeatedly in US race relations, as well as among various people of power throughout history.

4 months, 1 week ago

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Dane Pratt

Correct me if I’m wrong but wasn’t Gatto indicted by the FBI for corruption and fraud among other things. Who committed the crime here, Adidas or Preston & De Sousa?

4 months, 1 week ago

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Tony Bandle

NCAA - Nothing Can Alter [our] Avarice!

4 months, 1 week ago

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Marc Frey

Alexander, Jackson, Preston, and De Sousa. Not happy with this trend, no matter who is to blame.

4 months, 1 week ago

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Tom Jones

Mom, mom, Billy and....?

But yeah, KU compliance should have been nosier for sure.

4 months ago

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Craig Carson

it took the FBI coming in to even find all of this..no compliance department at any university has the tools that the FBI has to find out EVERYTHING..they can only do so much..you really think any players family feels obligated to tell a university anything? KU cant uncover everything nor can they control anyone aside from the player

4 months ago

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Steve Hillyer

Victim or not this is a bad look for the program and is becoming routine, not only the players mentioned by Marc but don't forget McLemore also got in trouble with an agent while he was here. Bill doesn't need to be recruiting these players and it is kind of hard to believe he needs to cheat to be successful but it's starting to look like something maybe be a little rotten in the program and it's up to him to fix it.

4 months, 1 week ago

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Doug Merrill

Bill did not cheat, according to the indictment. What do you mean by "these players" or "doesn't need to"?
What makes Silvio one of "these players"?
Are you sorry he chose Kansas and by doing so he inadvertently shone the light on two bad guys?
If the FBI had something on Bill or the program, you can bet (no matter.what the former prosecutor said in print) that it would be in the indictment.

4 months, 1 week ago

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Marius Rowlanski

This was my refuge from the negative barrage that comes through media companies with agendas.

4 months, 1 week ago

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Mike Greer

Obviously the FBI is much better suited to carry forth investigations than either the NCAA or the university of Kansas. Assuming that because the FBI was able to uncover "play-for-pay" arrangements, by what I'm certain Adidas will claim to be a rogue employee, that either the NCAA or KU athletic compliance should have uncovered the same, is a bit of a reach.

As much as KU is responsible for due diligence, they can't be as through as the FBI, it's not within their powers. KU can ask the question " . . . did you take money from anyone that would make _____ ineligible . . . ? But they can't check your bank account or wire tap your phone or the phone of a shoe company executive. So, is KU a victim? Certainly as much as anyone who thought they were being careful, yet still fell for a scam, and that's a lot of people.

4 months, 1 week ago

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Steve Schoenekase

I tend to agree - KU is not a law enforcement agency and therefore has limited ability to verify/investigate a player's eligibility. They surely ask every player to report anything that might be a violation, but what else can they do?

It's kind of like flying. When you check-in, the ticket agent asks if you are carrying anything for another person that asked you to take it on the plane. You say "no" and they have to believe you. Now the TSA agent at the security check point can scan you, pat you down, take you in the other room for a full body cavity check, etc., because they are law enforcement. The ticket agent is not. If something bad happened on a plane, they look for the perpetrator and how they got thru security, they don't go back to interrogate the ticket agent or hold that person accountable.

Assuming Bill and the KU staff knew nothing about the alleged payments, it would not be right to hold them accountable. It's also not right to blame Silvio, if he didn't know about it, for anything other than accepting help from a guy he couldn't really trust. Of course, this is the NCAA and fair doesn't always matter.

4 months ago

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Benjamin Clay Jones

Bill couldn't shave for the banquet? Looks like he just rolled out of a boxcar on a freight train....

4 months, 1 week ago

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Mike Greer

I can't help but believe KU has a boilerplate statement and form for athletes and their parents or guardian to hear and sign, regarding impermissible benefits and NCAA regulations. Other than the obvious, Billy showing up on campus with a car, I really don't know what they can do. It's kind of the honor system for the parents to be up front and honest about cash flow. Obviously it would be very different if a coach or assistant were involved.

4 months ago

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