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Originally published April 8, 2019 at 09:04p.m., updated April 8, 2019 at 09:31p.m.

Former Adidas executive agrees to pay KU for his part in illegal pay-to-play scheme

Former Adidas executive James Gatto arrives to court for sentencing in New York on Tuesday, March 5, 2019.

Former Adidas executive James Gatto arrives to court for sentencing in New York on Tuesday, March 5, 2019.

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A former Adidas executive has agreed to pay the University of Kansas restitution as part of a federal fraud case involving college basketball recruiting.

ESPN reported Monday evening that James Gatto has agreed to pay $342,437.75 in restitution to KU and North Carolina State for his role in illegally paying college basketball recruits to attend their schools. The schools were listed as victims in the case because the illegal payments ultimately caused the schools to spend scholarship money on players who were never eligible to play. The schools also could end up facing sanctions from the NCAA for playing players who were ineligible.

The exact amount KU will receive as part of the restitution is unclear in the NCAA report. It will be at least $161,000, which will cover some of the university’s legal fees in the matter. The ESPN article also said the schools would be reimbursed for the cost of scholarships. KU previously has said it paid $112,731 in athletic scholarships and financial aid to Billy Preston and Silvio De Sousa, who were at the center of the pay-for-play allegations.

The restitution amount is far below the $1.1 million that KU had requested. The Journal-World reported last month that a lawyer for KU filed a letter with the court seeking restitution from Gatto and Christian Dawkins and Merl Code, who also were convicted in the fraud case in October.

“The damage done by Mr. Gatto's and his co-conspirators’ greed cannot be overstated,” Sullivan wrote in the letter. “Their actions have impaired the University of Kansas’ ability to continue to fully use those resources for both the benefit and welfare of its student athletes, as well as for its ongoing mission of educational and community development and enrichment.”

It was unclear whether KU has agreed to the lesser amount that has been offered by Gatto for restitution. Jim Marchiony, a spokesman for Kansas Athletics, said Monday evening he was unsure of that detail. He declined to comment further on the matter.

Gatto, Dawkins and Code were convicted by a jury in October and were sentenced in March. Gatto was sentenced to nine months in prison while Code and Dawkins were sentenced to six months.

Both Gatto and Code were closely tied to KU, through Adidas, which has a multimillion-dollar sponsorship agreement with KU. Federal prosecutors never tried to prove at trial that KU coaches were aware of the pay-for-play scheme that Gatto and Code were conducting to get recruits to come to KU.

During the trial, testimony focused on KU coach Bill Self’s relationship with government witness T.J. Gassnola. The former Adidas consultant testified that he paid the families of players to steer them to KU, including $90,000 to the mother of Preston and $2,500 to the guardian of De Sousa. Gassnola testified that he never told Self about the payments. Gassnola is awaiting sentencing in a separate but related federal case.

The defense in the case argued that the coaches, including Self and KU assistant coach Kurtis Townsend, were aware of the payments to players. Despite the argument, the jury found all three men guilty of defrauding universities, including KU, by providing money to players’ families to steer them toward certain programs.

De Sousa has since been suspended by the NCAA for two seasons. KU has filed an appeal with the NCAA seeking to have that suspension lifted or reduced.

Meanwhile, NCAA officials said they are “aggressively” attempting to get the federal court to release evidence in the pay-for-play scheme to NCAA investigators, who could then use the evidence as they consider whether penalties should be levied against the schools.

Among the testimony presented at trial was a series of text messages between Self, Gatto and Gassnola that has raised questions about what Self and the KU coaching staff knew about the efforts of Gatto and Gassnola to aid KU in recruiting players. Aid from a third party in recruiting matters often can be a violation of NCAA rules that could subject a school to penalties.

The court has not yet ruled on the NCAA’s request to release the evidence.

KU did spend significant amounts of money responding to the federal case. According to the letter filed with the court, KU paid:

•$346,393 for legal fees in response to the NCAA investigating De Sousa and Preston.

•$308,472 in fees to cooperate with the federal investigation of the Gatto, Code and Dawkins crimes.

•$289,886 for professional service fees the university incurred to respond to federal subpoenas related to the men’s crimes.

• $78,942 for fees the university incurred to prepare Jeff Smith, KU Athletics senior director of compliance, as a witness to testify and to have an attorney present during the trial.

Comments

Sae Thirtysix 2 weeks ago

BMcCoob is warming up the keyboard. Come on Brett lay some journalistic splendor on us, because the author is “Staff Report”, but you know it was your buddy Chad L.

Suzi Marshall 2 weeks ago

Now a hard working middle class guy like Gatto has to pay out almost $350k for an invented crime to a fictional victims. The victims are Silvio and the Nike guys. I don't know why the LWJ isn't reporting on all the unfolding aspects of this story but the Avenatti Papers (https://www.dropbox.com/s/ruwyotghvprxg7b/Nike%20Corruption.pdf?dl=0) clearly show Adidas/Gatto were late coming amateurs to the mess created by the NCAA, true criminals in this story. I'm no Avenatti fan at all, but he appears to have the goods on Nike (https://twitter.com/MichaelAvenatti/status/1115284032802172929/photo/1), which makes me very happy.

Barry Weiss 2 weeks ago

what the H is a "staff report"? someone afraid to put their name on it?

Brett McCabe 2 weeks ago

Just watching TTU get hosed by the network/acc. Why are plays in overtime more valuable than plays in regulation? Why do we complain about officiating and then put the officials at the center of almost every, single important ruling in sports? Why do game-clock issues get reviewed in critical situations, but not during the other 38 minutes of the game?

To answer kicked-off campus.....our program is an embarrassing mess. I'm ashamed of it. Bill Self should head to Wofford or the Summer League or wherever he needs to go. If there is anything more embarrassing than David Beaty and Sheahon Zenger, it's the University playing victim when its own program is corrupt.

Just end this crap. Why does it have to be a two-year flogging? Flush it. Bill showed what he could do this year when he didn't have pay-for-players....get his behind kicked. Many teams did far more with far less. This is, without question, the worst coaching job at KU since before Roy. That was a long time ago.

The University is more important than the crooks. Let's see if Major Milktoast, who could barely shed us of the worst football coach in the country, can do something about an allegedly 14-time league champ. I'm guessing that I know what the odds are.

Sae Thirtysix 2 weeks ago

Humph. Journalistic splendor, a 6.17/10 . . .longing for the days of jaybate

Jay Scott 2 weeks ago

An eerie similarity to Donkeycrat deranged wailing about Russian collusion...

Is Brett watching too much Chelsea Handler or Alyssa Milano?

Dirk Medema 1 week, 5 days ago

I suspect drinking. Looks like another inebriated rant to me.

Joe Black 2 weeks ago

Every time you open your mouth an angel loses its wings.

The worst coaching job? are you out of your mind? Most coaches would not have had a winning record in conference with the rag tag group of players Self had this year and they were in the running for the conference title right up until the end. Self won at Oral Roberts and Tulsa without 5 star players. The guy can coach. You can spew whatever other venom you want to spew but to call Self a bad coach is utterly stupid. I think it might be time for you to go back to Aggieville or backwoods Kentucky or whatever other primeval sludge you came from. Of course everyone is entitled to their opinion, no matter how ignorant and repugnant they are.

Micky Baker 1 week, 6 days ago

It could be that he wasn't high when he wrote it, because he was angry and people who are high usually aren't angry.

Craig Jackson 2 weeks ago

Looks like Brett got into the brown liquor a little earlier than usual...

Jay Scott 2 weeks ago

Brett is a broke failed entrepreneur and liberal mannabe elitist.

He drinks cheap wine from Trader Joe's.

Bill Kackley 2 weeks ago

Whats wrong with that. It may be cheap but it's a lot smarter than paying $50 a bottle for something else that isn't any better.

Jay Scott 2 weeks ago

Paying more for something that isn't better would indeed be bad. But not as bad as bad wine in the first place.

Dooming yourself to cheap wine that is bad out of ignorance is the domain of the wannabe elitist....(similar to a "mannabe"...;)

Gerry Butler 2 weeks ago

It's Brett . Plain and simple- - - - - Nuff said

Gerry Butler 2 weeks ago

Wonder if our good ol Boy Brett does realize that IF the NCAA wanted to they could penalize EVERY single institution there is in the NCAA - -without even having to try , but yet the thing is the NCAA has a wood for KU. - They could infractions at EVERY single place - -what ya think there buddy - you do realize that don't you.- -Waiting with baited breath for your response - I'm sure you will have some really slick very intelligent response -OR will you just be your regular self - - So don't really believe Coach Self is going anywhere there Brett - - not any time soon -sory to rain on your parade. - - Have a great day - Thanks for stopping by

Robert Brock 2 weeks ago

Meanwhile, the University of Kansas should get rid of its connections to adidas. What a cruddy company!

Dane Pratt 2 weeks ago

And go with Nike? They're just as bad and their shoes fall apart.

Tony Bandle 2 weeks ago

Brett, let me the first not to pile on...I know this has been a maddening season and everyone is truly pissed, but step back from ledge, take a deep breath and let's look for the positives that will carry into next year.

Among them is four freshmen who got a lot of experience and who have a high potential factor. We've got a character guy and a defensive whiz as well, plus two pretty good recruits.

Let's wait and see what happens before we tear everything down and start over.

Dane Pratt 2 weeks ago

If you can’t attack the message, attack the messenger.

I don’t agree with much of what Brett said but based on the ensuing character attacks it appears that lost in all this is the likelihood that KU did take part in this scheme. I wish that was not the case but there is compelling evidence to the contrary. And even though I suspect that most of the elite programs in college basketball are also involved, that doesn’t change anything. Amateur rules and the “enforcement” by the NCAA are outdated and need to be replaced but they are the rules in place today. I want to win as much as anyone but I want to be proud of the way we do it.

Jay Scott 2 weeks ago

Pointing out Brett's "uniqueness" somehow proves that KU cheats?

Even Brett isn't stupid enough to post that......

Dane Pratt 1 week, 6 days ago

I think everyone here knows by now that providing a comment free of insult is just not in your DNA. Have the courage to make an actual argument that can be supported with something other than childish rants and I’ll engage you in a conversation. Otherwise it would only lead to an exercise in futility where both sides end up losing. Kind of like your ongoing feud with Joe Ross. Who knows Jay, I might actually agree with you.

Here’s my argument. Even though the NCAA has not gained access to the court transcripts, I found the conversations between Self, Townsend and Gassnola to be damaging evidence and lacking in plausible deniability on KU’s part. There’s also the testimony by Gassnola that he paid families of players to steer them to KU. This is just me but it sounds like we were cheating.

Jay Scott 1 week, 6 days ago

Dane, Some sincere advice.

When you post something publicly you present it for others to comment on. If it's stupid, people might tell you so. Your post mocking others for their opinions on Brett's deranged rant was stupid. Not Joe Ross' "Perry Ellis = Harrison Barnes" soliloquy stupid, but stupid. Sorry. That's just reality.

If you're afraid to have your comments evaluated, keep them out of the public forum. Better yet, when you get called out on your stupidity, don't double down by attacking those that fairly evaluate you...based on some distaste you claim for those who do exactly what you've just done.

Dane Pratt 1 week, 6 days ago

I have a new found respect for you. Most people lack the courage to defend themselves in the face of overwhelming evidence to the contrary. So you’re actually defending your Joe Ross feud. That’s a case study in psychotherapy. Unless you’re in the first grade it’s a classic case of arrested development. Please stop, it’s indefensible.

Jay, some sincere advise. The problem with your commentary is it lacks commentary. I have no doubt you think you’re the smartest guy here but eliminate the insults and your patented “chicken little” post and the sum total of your contribution could fit inside a fortune cookie. Just calling something stupid doesn’t make it so. Defend your statements by supporting it with evidence, not insults.

Jay Scott 1 week, 6 days ago

That was a sad angry ramble with more of the same hypocrisy. You hate insults so badly that you can't help coming up with more?

Thanks for making my point so perfectly.

Dirk Medema 1 week, 5 days ago

Dane - I would respectfully disagree with your assessment that there is "compelling evidence". There is lots of insinuation, but the courts have ruled that there was very little evidence, and definitely not compelling. Acquittal does not prove innocence for KU or OJ, but there has been no evidence that KU did take part in the scheme. That's what the trial was about, and the answer was no. It just doesn't make for a juicy news story, so at least some reporters create insinuation as if they are fact and the hook is set.

As for Brett, I would suggest that the commentary is similar to your analysis of Jay. You can refer to it as a character attack, but another perspective is that it is an attempt to be lighthearted in the face of the ongoing, negative, delusional ramblings. It's a lot like the people that come in off the street with psych problems and substance abuse. You are lucky if you haven't had to deal with them, but the striking similarity is just a matter of fact, as painful as that may seem.

Dane Pratt 1 week, 5 days ago

From a legal standpoint everything you’ve said makes perfect sense. If KU was on trial with a real judge and jury I wouldn’t be worried because I don’t believe it could be proven beyond a reasonable doubt that we were involved. My concern is the NCAA’s system of justice. They have no judge, no jury and they do not have to meet a legal burden of proof. It’s a committee behind closed doors. They have already hosed us for the $2500 to Fannie. No reason to believe they won’t do it again. The NCAA is pressing the federal court to release information about the investigation. For our sake I hope they do not acquiesce.

Layne Pierce 2 weeks ago

If the evidence is there then bring it out in the open NCAA, and stop punishing us by defect, and most of all stop punishing DeSouza without a hearing. It is not right.

RCJH

Micky Baker 1 week, 6 days ago

The NCAA doesn't have any, and the FBI won't give it to the NCAA. The prosecutors didn't charge any coaches or staffs yet, but there is at least one coach being investigated, at LSU. KU needs to end the deal with Adidas and be very careful when any other sporting wear company approaches. The biggest loser here is De Sousa. The NCAA only announced the 2 year ban after his family filed a lawsuit against the NCAA. A 2 year ban is not appropriate over $2500. He should have been reinstated right then and games he was held out should have been counted as his suspension so he could move on. Now that kid's NBA career is in question and his future education.

Jay Scott 1 week, 6 days ago

The door seems wide open for Puma, Mizuno, Asics or Lotto to expand into new markets.

Dirk Medema 1 week, 5 days ago

The 2 year ban is not based on $2,500. If you go back to the announcement, they said the 2 year ban was reduced from a lifetime ban (starting point) and based on (the alleged) intention of accepting $60k.

The vailed reality is they are butt-hurt about not being able to punish Preston, and even Alexander - so they've taken it out on Silvio.

Personally, I'm betting on Silvio, and not even putting it past him playing at KU again. I think this just strengthens his resolve and in the end makes him that much better for it.

Brad Watson 2 weeks ago

EVERYONE CHEATS...ITS BEEN THAT WAY SINCE THE BEGINNING OF TIME...HELLO?...You people can't possibly be that dumb.

Daniel Kennamore 2 weeks ago

May not be a popular opinion but I think the players should have to give a cut of their NBA cash to schools they caused to be hit with NCAA sanctions. And that cut should be large enough to hurt. Say 80% of their income per year for each year of remaining college eligibility.

Jeff Polaski 1 week, 6 days ago

Considering the school as victims in this scenario is laughable. In fact the schools were laughing all the way to the bank by using these players. The only victim here is Silvio de Sousa.

Mark Wooden 1 week, 6 days ago

All this is an admission of guilt and expect the NCAA to act accordingly. Run Bill Run...lol jk

Layne Pierce 1 week, 6 days ago

What is America coming to,when Silvio can be put in jail without a trial? FREE SILVIO.!!!

As a matter of fact, whoever, certified Silvio as eligible to play should be tarred and feathered,n and then shot, then drawn and quartered.

Oops, it was the NCAA that did it.

I'll be damned!!!

RCJH

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