James Gatto, the former head of global sports marketing for German sport equipment maker Adidas AG, as well as two other company employees, have been found guilty of involvement in a scheme to bribe US high school basketball players to attend universities with Adidas-sponsored teams, defrauding universities and US college basketball's governing body, the National Collegiate Athletic Association (NCAA).
According to the jurors, Gatto, as well as former consultant for Adidas Merl Code and former sports agent Christian Dawkins, arranged to pay families of top recruits in return for the players attending North Carolina State University, the University of Louisville, the University of Kansas and the University of Miami, all of which have basketball teams sponsored by Adidas.
"We cooperated fully with the authorities during the course of the investigation and respect the jury's verdict," Adidas commented in a statement. "We have strengthened our internal processes and controls and remain committed to ethical and fair business practices.
According to the prosecutors, while NCAA rules forbid student athletes from being paid for playing, the payments arranged by the trio to the players' families compromised the universities that were unaware of the arrangements. The prosecutors said that while payments to the families made the athletes NCAA-ineligible, they also made the universities those players attended legitimate targets for NCAA sanctions, which the court identified as defrauding.
The defendants' lawyers argued during the trial that it was not a crime to violate NCAA rules, and their clients' actions were intended to help the universities attract star players, not defraud them. All three defendants are expected to appeal the ruling, but the exact dates for those processes have yet to be set.