A New York City jury has found the three defendants in a case about illicit payments to amateur basketball players guilty of conspiracy to commit wire fraud and wire fraud.
The trial gave the most expansive look yet at the "shoe wars" between Nike, Adidas and Under Armour for the loyalty of top amateur basketball prospects.
Federal prosecutors alleged Adidas sports marketing executive Jim Gatto and co-defendants Merl Code (a former Adidas consultant) and Christian Dawkins(an aspiring agent), steered payments to players being recruited by the University of Louisville, North Carolina State, the University of Kansas and the University of Miami. Adidas outfits each of the schools.
Prosecutors alleged the defendants wanted to boost sales of Adidas merchandise at the universities and ultimately win the endorsement services of the players when they turned professional. In their opening arguments, lawyers for the defendants didn't dispute the payments. But they said they're violations of NCAA rules, not federal crimes.
It took the jury three days to come back with guilty verdicts.
Sentencing is set for March 5, according to CBS Sports reporter Matt Norlander, who tweeted from the courthouse.
"We cooperated fully with the authorities during the course of the investigation and respect the jury's verdict," Adidas said, in a statement. "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."
Adidas on Wednesday also said Gatto was placed on administrative leave at the outset of the case.
"As soon as we learned about the allegations, we engaged outside counsel to conduct a thorough investigation of our grassroots and college basketball programs, and we put the individual charged on administrative leave," the company said, in a statement. "We ask for your understanding that we will not comment on anyone’s future employment status at this time."
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