College Basketball Money scandal

[Hot Rod Hootenanny]

FBI breaks out indictments against 4 assistant college b-ball coaches, someone working for Addias sportswear.
https://sports.yahoo.com/fbi-probe-uncovers-massive-college-basketball-scandal-snaring-big-time-programs-144631716.html?utm_content=buffera9bab&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

[SP Cook]

Louisville.  The most corrupt program, football and basketball, in the NCAA.  Should get at least a two year ban (so-called death penalty). 

[bing101]

Well this is the Fifa scandal again but this time here in the USA.

[Brandon]

Louisville.  The most corrupt program, football and basketball, in the NCAA.  Should get at least a two year ban (so-called death penalty). 

I only see Auburn, Arizona, Oklahoma State, and USC listed in the Yahoo article.

Here's a bit more on it:

http://www.detroitnews.com/story/sports/college/2017/09/26/college-basketball-fraud/106008504/

Some of the most explosive allegations appeared to involve Louisville, one of college basketball's biggest powerhouses, which is already on NCAA probation over a sex scandal. The investigation also appears to include Louisville five-star recruit Brian Bowen, a Saginaw native and onetime Michigan State target.

http://www.detroitnews.com/story/sports/columnists/john-niyo/2017/09/26/niyo-fbi-probe-exposes-college-hoops-ugly-truths/106031926/

"We got lucky on this one,"  Pitino told a Louisville radio station a few days later. "I had an AAU director call me and ask me if I'd be interested in a player. ... I said "˜Yeah, I'd be really interested.' They had to come in unofficially, pay for their hotel, pay for their meals. We spent zero dollars recruiting a five-star athlete who I loved when I saw him play. In my 40 years of coaching, this is the luckiest I've been."

The Hall of Fame coach probably is feeling otherwise today, as Louisville quickly issued a statement Tuesday acknowledging it is part of the federal investigation. That was obvious even without the school being named in the charging documents, which all but spelled it out in describing at length the alleged plans to funnel $100,000 to "Player-10"  to secure his commitment to "University-6,"  which came "on or about June 3, 2017, or almost immediately after the illicit bribe scheme set forth herein was agreed to."  Of course, that's the same day that Bowen announced his college choice.

http://www.freep.com/story/sports/college/louisville/2017/09/26/university-louisville-recruits-college-basketball-scandal/703820001/

University-6 is described as a public research university in Kentucky with an enrollment of 22,640. The University of Louisville is Kentucky's only school that matches that description, and the university confirmed that it is "included in a federal investigation."

The federal criminal complaints accuse James Gatto, Jonathan Brad Augustine, Merl Code, Christian Dawkins and Munish Sood of wire fraud by providing money to pay "high school student-athletes and/or their families in exchange for, among other things, the student-athletes' commitment to play basketball for University-6."

[Hot Rod Hootenanny]

Louisville.  The most corrupt program, football and basketball, in the NCAA.  Should get at least a two year ban (so-called death penalty). 

This is the FBI, not the NCAA. Its going to be awhile before sanctions come about.
Time will tell if this is a tempest in a teapot or as wide spread as the 1950s point shaving scandals.

[HazMatt]

Pitino and the AD are out.  Should've cleaned house last year.

[english si]

Well this is the Fifa scandal again but this time here in the USA.

The FIFA scandal was bribes to top officials in order to buy their vote, etc. This is to players/their families in order to compensate them for playing for their team, wearing their clothing, etc. There's a huge difference here.

On the one hand, you have millionaires getting paid millions in order to stage a tournament in place X and for the briber to make lotsa money. On the other hand, you have teams resorting to illegal methods in order to compensate their money makers in ways normal everywhere in sport but the NCAA, because of the draconian rules means that they can't do their moral requirements to pay the labor they are profiting off openly.

The only immorality here is that it's an unfair advantage for the teams that have done this thing that morally ought to be every player in every team without having to resort to illegal back-channels.

[SP Cook]

Bull.

Want to be any health care profession?  A vast majority of your studies will by YOU paying tuition to work, FOR FREE, for a large super-profitable university (generally the very same ones as being discussed here).  For an MD (average salary under $200K) that is two full years, followed by 2 to 4 years of residency (legally capped at $56K for upwards of 60 hours work).  Heck, in my state, if you want to go into pharmacy, HALF of the program is working FOR NOTHING back in your home town (not in the cities the schools are located in) for mega corps like Rite Aid, CVS, Wal-Mart, etc. 

Want a legit PhD?  My daughter is getting one.  Four to five YEARS, making $26K and teaching/proctoring/office for 20 hours per week.  With very limited benefits, including NO Social Security eligibility. 

What to be much of anything?  Son-in-law's last semester in accounting involved one three hour actual class.  And 40 hours/week free work for an accounting firm. 

All this to get nice, upper-middle class jobs.  And I can say the same about a lot of blue collar union jobs which involve lengthy apprenticsihps for big companies or unions themselves. 

So some poor exploited ballplayer has to work for a year or two before becoming a MILLIONAIRE.  Cry me a river.

[english si]

So some poor exploited ballplayer has to work for a year or two before becoming a MILLIONAIRE.

Like 3% of them will do so - very few college athletes end up going pro. Most Medical Students would work as medical professionals when done. And they can earn the big bucks for the rest of their lives - they can quickly become millionaires. Pro athletes (if they earn that much anyway to become millionaires - not all of them do), when they retire after about 10 years, face another cull of most of them when it comes to the big jobs, like top coaches and pundits and the like.

Also, as their institutions insist, they aren't there as apprentice/trainee sports players, but as students studying something else. The work experience is not part of the qualification, unlike the examples you give (and yes, these things suck too). You can't cite the unpaid work of medical students, etc, when the whole narrative of athletes not getting money is that this is not about landing a well paid job at the end of it, but rather that its a bit of fun that they apparently do on the side from their studies, a side thing that they do.

One also has to notice that these 'student athletes' make their institutions lots of money (far more than medical students for example), and the NCAA too, but while their coaches earn millions each year and really fancy stadia get built to keep everything non-profit, should the players get a dollar off their work then that's the end of their career. I doubt a medical student receiving a low value gift as a thank you would be treated in such a way as the NCAA treats it.

The NCAA is a far cry from the 19th century spirit of amateurism in sport that it claims. In some ways that's good, and in others it's bad - it was always about class and status rather than not receiving a penny for their success on the field (they usually milked the expenses that they could claim, and could get sponsorship deals) - it was always about snobby stuff like separate dressing rooms for 'Gentlemen' and 'Players', the captain always being an amateur (ie from the officer/professional/upper-classes) rather than a pro (ie from the fodder/working/lower-classes). Note however that they played together - either on the same side (the normal situation), or against each other, rather than had their own thing.

One person in my school went Notre Dame to play soccer. Afterwards he returned to the UK, where soccer is more lucrative. He's had a relatively successful career and captained a side for a number of years with the side doing well during that time. While I can't find his wages, figures given by the clubs he's played for as examples of wages means that I would imagine they'd be below mean earnings of our high school class 13 years later - they aren't bad wages, but they aren't great. Those who went down the doctor route are going to be earning more than him this year - albeit having had some terribly low earning years previously - but their career is just beginning, rather than in its last few years like a soccer player in his 30s.

[Scott5114]

The thing that I am not exactly understanding here is how is it wire fraud and, thus, why is the FBI involved? Obviously if you give a politician X to make decision Y, that's corruption and illegal. But if you give a private citizen X to take job Y it's just providing an incentive. So where does it become a crime if the private citizen is a student athlete? Is it because these are state universities or something? I mean, obviously NCAA rules are broken, but they don't really matter for the purposes of whether something is criminal or not.

[hbelkins]

I should have eaten at McDonald's today, because obviously I'm Lovin' it! 

The thing that I am not exactly understanding here is how is it wire fraud and, thus, why is the FBI involved? Obviously if you give a politician X to make decision Y, that's corruption and illegal. But if you give a private citizen X to take job Y it's just providing an incentive. So where does it become a crime if the private citizen is a student athlete? Is it because these are state universities or something? I mean, obviously NCAA rules are broken, but they don't really matter for the purposes of whether something is criminal or not.

I posed the same question to a UK sports list I'm on. I've always been bothered by the incident that sent North Carolina car dealer (and prominent NASCAR owner) Rick Hendrick to prison a few years ago. He was accused of paying corporate officials to provide popular vehicles to his dealerships. To me, this is no different than if I slip the host or hostess at a restaurant $20 to get me a better table, or move me to the top of the list for seating. That doesn't seem to be in any way illegal to me; it's capitalism at its finest.

I got this answer...

18 USC 1343, 1349, and 1956(h) and 2

Wire Fraud
In this case, the fraud was perpetrated against the universities in question. When a student athlete signs a letter of intent, I believe he states that he's not aware of any violations associated with his recruitment. The allegation is that the defendants defrauded the universities by arranging for the recruits to sign erroneous statements (thus putting the universities at risk.) In addition, the universities were damaged by paying for scholarships when the athlete was ineligible.

Wire Fraud Conspiracy
Just a conspiracy allegation associated with the fraud.

Money Laundering Conspiracy
The defendants arranged for cut-outs for some of the payments (associated with the allegation of fraud) -- ergo, laundering.

Obviously, this has been huge news in my home state. I read something this morning that indicated the whole investigation started when someone was skimming money from a movie production endeavor.

[SP Cook]

One person in my school went Notre Dame to play soccer.

Notre Dame tuition is $49,178/year.  Room and board is another $14,500.  Ask anybody who will be in student loan debt deep into their 30s or even 40s if they would like to be "exploited" by getting to attend one of the better academic institutions in the USA for F R E E . 

Beyond that, it is really a myth that college athletics are this super profitable deal.  Really only at a few schools, because NCAA and Title IX regulations forces colleges to field teams, and give scholarships, in sports that are not popular.  Most schools lose money at sports, and there is a growing movement, because most schools add an "athletic fee" into tuition, which many students have no interest in the sports. 

The reason that most schools field teams is what is called "Hayes Law" which is "most people with no real relationship with higher education believe that the quality of a school is proportional to the quality of its football team."  (Substitue basketball in NC and KY).  This is true.  Ask most Americans to name good colleges and, after Harvard and Yale, they will just name the ones with big time football.  Ask most Americans to name the best school in their state and they will name the one named for the state or big city with the football team, which is very rarely even in the top 10 in academic rigor.  (Louisville is on the verge of losing its acreditation).

[SP Cook]

I've always been bothered by the incident that sent North Carolina car dealer (and prominent NASCAR owner) Rick Hendrick to prison a few years ago. He was accused of paying corporate officials to provide popular vehicles to his dealerships.

Not to hijack, but what Slick Rick did was this.

If you remember, back in the early days, Hondas were ultra low price crapmobiles.  Many Honda dealers were hardware stores, even gas stations.  Parked a few out back and would sell you one.  Then, in the late 70s and 80s Honda became a solid car and got a real dealer network.  Then Honda launched Acura.  And the Honda execs told the dealers that Honda was going back to be a crapwagon and Acura would be the brand with the real cars.  They had to pay to get an Acura franchise.  Feds came in and the execs all went back to Japan and forgot that they could speak English and the dealers (not just Slick Rick, but several) got caught. 

(Slick Rick later bought a pardon, but that is another story.)

Back to basketball, while this is a complex deal, I have always said that the Feds are the way to control the cheating in college sports.  If you pay $$ to an athlete and don't send the IRS a 1099, that is conspiracy to help evade taxes.  If you take $$ and don't file a 1040, that is tax evasion.  If you give somebody more than $10K cash, that is a currency control violation.  Really that simple.  Perp walk a few boosters, coaches, and players in the local IRS HQ and problem solved.

[english si]

Ask anybody who will be in student loan debt deep into their 30s or even 40s if they would like to be "exploited" by getting to attend one of the better academic institutions in the USA for F R E E . <snip> Ask most Americans to name the best school in their state and they will name the one named for the state or big city with the football team, which is very rarely even in the top 10 in academic rigor.  (Louisville is on the verge of losing its acreditation).

So, in other words, my old classmate was EXTREMELY lucky that he went to a top sporting school that was also academically rigorous as the two are mostly mutually exclusive. ie most people on sports scholarships don't typically get such high fees paid for them, nor do they get a quality product in the form of the degree they get at the end. Play for Louisville and you play for a college that makes enough off sports to bribe people to come play for them, but you get nothing but a terrible college education at the end unless you are lucky enough to get scouted by a pro-team.

My old classmate is also extremely lucky that his dad is loaded, as even if he did get a scholarship (I'm not sure he did) he delayed going pro in the UK for a year to go play for Notre Dame. If he stayed in the UK his college tuition would have been about the same the cost of his flights to and from South Bend. He'd also have got a £3000/year loan with generous interest rates and pay back arrangement for his maintenance, and he'd have been paid by the football club. If his dad wasn't loaded, he'd have taken the cheaper option of not going to Notre Dame, but staying in the UK and earning.

He came back home after his Freshman year to play professional soccer at a team that paid him peanuts and didn't want him playing for them (instead loaning him out to more minor clubs), so I can't imagine the Fighting Irish experience was very good - it certainly wasn't his grades (3.7 GPA, Dean's list both semesters) or his soccer (251 minutes of play, named to the BIG EAST All-Star Team) that meant he came home after just one year.

Beyond that, it is really a myth that college athletics are this super profitable deal. <snip> The reason that most schools field teams is what is called "Hayes Law" which is "most people with no real relationship with higher education believe that the quality of a school is proportional to the quality of its football team."  (Substitue basketball in NC and KY).  This is true.

So basically it's invest in athletics or make no money? Sounds like something profitable to me! And given that most state's highest paid public employee is a College Sports coach, it clearly is a profitable industry - we're talking a multi-billion dollar industry here. The reason they don't make money is that they are non-profit organisations and so have to tweak the accounts to not make money - funding less popular sports is a handy way of soaking up the money.

As for supplements this is as it is very profitable for some schools, and the other schools need to boost their finances to play on a similar level.

[jemacedo9]

They way I understood the issue is this:  the NCAA is given federal funding to provide scholarships to students who are otherwise not getting paid; so if the universities knew about students getting paid through back channels, and worse, somehow helped facilitate is, that those scholarships should not have been given to those students, and therefore applies elsewhere or not used...so it's defrauding the federal funding provided.

I may have misheard that take yesterday, but that seems to make a little bit of sense to me.

[bing101]

https://www.cbssports.com/college-basketball/news/college-basketball-scandal-updates-news-on-rick-pitino-fbi-investigation/

An update on the NCAA fiasco.
Post Merge: September 29, 2017, 06:29:11 PM
https://deadspin.com/rick-pitino-denies-responsibility-for-louisville-prosti-1788038358

Damn Pitino is Sepp Blatter and Jerry Sandusky combined according to this allegation.

[formulanone]

Pay the damn players something; they don't all go pro. Stop making them weary of accepting a blueberry pie or a pair of sneaker while schools fatten themselves off sporting events, tickets, and corporate sponsors; turn around and pay coaches hundreds of thousands of dollars. The college markets their skills and while some players get a free ride, many more try out entirely on their own dime (or a loan).

A small percentage use that skill towards their profession, and the rest of the team may forsake a lot for being on a team rather than focus most of their energy towards getting great grades (although, there's a few that do really well in both). This help make any grading favoritism the players get in return begin to disappear.

Not sure how much the NCAA might decide to pay them, but let's just drop the purity-of-the-game nonsense already. Stop pretending it's 1920, with all the traditions of the past still ringing true with all the glitz and glamour the school stirs up to profit off their work. There's few opportunities to make side money for many student athletes, due to the amount of time they have to sacrifice.

That's not to say I have it all figured out: who figures out how much a second-string tennis player gets compared to a quarterback? Does a school with huge donors get the right to pay their players thousands, while a tiny Division III school's basketball team with a student body of 1200 gives their students a couple of red cents...or is there a scale? I'm not sure.

They had to pay to get an Acura franchise.

Every dealer principal pays for an automobile franchise, so that's not it. There's no magic dealership fairy.

He got caught bribing.

[1995hoo]

Funny, the "Hayes Law" mentioned above is a principle I've heard of under different names–I've heard the "Flutie Effect" after applications to BC spiked following his famous pass, and I've heard it called the "Final Four Effect" at schools that make said event and see applications spike (especially at Duke in the mid-1980s/early 1990s).