Update of Federal Investigation into College Basketball
NC State Community:
Last week the U.S. Attorney’s Office in the Southern District of New York released a superseding indictment alleging an athletic apparel company defrauded four NCAA Division I universities, including NC State.
While there are no indictments against former (or current) NC State employees, the document includes allegations of an October 2015 payment from an athletics apparel company conveyed through an unidentified former NC State coach to an unidentified parent of a student-athlete. As the indictment stated, the payment was designed to be concealed from both the NCAA and officials at NC State.
NC State is fully cooperating with the U.S. Attorney’s Office and the NCAA. From their first contact with us in January, the Southern District of New York has adamantly requested we keep details of their investigation confidential.
A hallmark of this university, however, and something very important to me personally, is to be as open and transparent as possible. Given the details released by the Southern District of New York last week, and the information previously made public, we feel we can now provide our community more specifics about NC State’s involvement without jeopardizing the investigation.
The details that follow demonstrate that the university has worked to responsibly and proactively search for, and when identified, report relevant information. Linked is a timeline document that outlines key NC State actions throughout this process. Also linked is the subpoena issued to the university on January 17, 2018, and the subsequent superseding indictment mentioning NC State on April 10, 2018.
A few highlights from the timeline follow.
- On September 26, 2017, NC State officials learned from the media about the U.S. Attorney’s Office announcing a series of complaints against Adidas, several college programs and top prospects in college basketball. There was no mention of NC State.
- In response, because NC State Athletics is sponsored by Adidas and to err on the side of caution, the Office of General Counsel and Athletics’ Compliance staff proactively contacted current and former basketball coaches asking whether they had any knowledge or involvement related to the allegations coming from the U.S. Attorney’s Office. All stated they had neither any knowledge of nor involvement in the subject matter related to the FBI’s investigation.
- On October 19, 2017, NC State’s General Counsel spoke with a Wilmington registered sports agent who stated he believed Dennis Smith, Jr. attended NC State due to influence by Adidas through Dennis Smith, Sr. The agent did not provide specifics about any other individuals involved. General Counsel informed the agent she would both report the information and further investigate. General Counsel directed Athletics Compliance staff to conduct an in-person interview with the sports agent.
- On October 25, 2017, Athletics Compliance staff conducted a face-to-face interview with the agent. The agent stated having no direct knowledge of any payments and declined to share names of anyone who might be involved. He also stated that no NC State employees were involved, and had no information that Dennis Smith Jr. was involved.
- On October 30, 2017, Athletics Compliance sent the agent a letter via certified mail outlining details of the interview for confirmation, providing the agent time to review and provide any corrections. The agent did not respond with any corrections.
- After providing the agent time to respond, General Counsel called the FBI providing them information from the agent’s report in case it was germane to the federal investigation.
- On January 16, 2018, the U.S. Attorney contacted NC State’s General Counsel about the forthcoming grand jury subpoena, stressing the need to keep the investigation details confidential. University officials began collecting records requested in the subpoena. Stressing confidentiality, only a handful of individuals who needed to know to collect records were informed: no coaches or student-athletes were informed about the subpoena.
- On March 9, 2018, NC State confirmed – with awareness of the Southern District of New York – that the university had received a subpoena on January 16.
- On March 16, 2018, in consultation with the North Carolina Attorney General’s Office, NC State released the subpoena under the North Carolina Public Records Act to the media.
NC State’s Think and Do attitude includes doing the right things for the right reasons. As the outline demonstrates, NC State has acted proactively, ethically and responsibly. For example, as soon as we received unsubstantiated information from a third party we immediately investigated and reported it to the FBI. I’m pleased with the way our Office of General Counsel and Athletics Compliance has managed this process.
I’m also pleased with the culture Athletic Director Yow has established at NC State. She has led an intentional and consistent emphasis that all NCAA rules and regulations are always to be followed by all coaches, staff and student-athletes.
If the allegations from the superseding indictment are proven true, any former employees involved knew they were breaking the rules and chose to keep it hidden. We have no tolerance for those who would choose to damage the reputation of this great university. NC State will continue playing by the rules, winning the right way and succeeding with Wolfpack character.
Thank you for your support of NC State.