University of Kansas

In closing, attorney for Adidas defendant argues KU’s Bill Self knew of payments

An attorney for an Adidas executive accused in a federal college basketball corruption trial argued coaches Bill Self and Rick Pitino knew about payments to players and his client was acting on their behalf to help Adidas and their schools, not to defraud them.

James “Jim” Gatto, who is on leave from the shoe and apparel company, and two another defendants are accused of wire fraud and conspiracy to commit wire fraud by scheming to pay the families of top basketball recruits. According to the prosecution, the schools, including Kansas, were victims of the conspiracy because players whose families received payments would be ineligible.

But Gatto attorney Michael S. Schachter, during a 1-hour, 10-minute closing argument Thursday at the Moynihan U.S. Federal Courthouse in Manhattan, recalled testimony, including from former Adidas consultant and government witness Thomas “T.J.” Gassnola, that Schachter says shows the coaches wanted the payments to be made.

”There is not a single example where any of these payments were Jim’s idea,” Schachter said. “Why did Jim arrange for these payments? Ladies and gentlemen, that was his job as a middle manager in basketball sports marketing. Jim’s job was in part to support the colleges that Adidas sponsored.”

Gassnola testified he paid $2,500 to the guardian of then-recruit Silvio De Sousa, now a KU sophomore, and also planned to pay the guardian $20,000. Gassnola also testified KU coaches had no knowledge of his payments to families of players.

Court testimony from last week shows that on Aug. 9. 2017, Gassnola texted KU assistant coach Kurtis Townsend about the guardian, Fenny Falmagne. Gassnola told Townsend, “Hit me when you can,” and Townsend replied, “Coach Self just talked to Fenny. Let me know how it goes.”

Gassnola also texted Self, KU’s head basketball coach, saying he talked with Falmagne. Self asked “we good” over text, and Gassnola replied “always,” saying this was light work and the ball was in Falmagne’s court now.

That same day, Gassnola texted Self to call him when he had five minutes and he was alone. The two had a five-minute, six-second phone conversation. The call was not wiretapped by the FBI nor played in court.

De Sousa committed to Kansas on Aug. 30, 2017. Self had a five-minute phone conversation with Gatto a day later, during a time the FBI was wiretapping Gatto, but the conversation was not recorded because of a “technical issue.”

“Kansas’ head coach knew of and asked for a payment to be made to Silvio De Sousa’s handler,” Schachter argued Thursday. “Coach Self and Coach Townsend asked for Adidas’ help in making this payment to Fenny.”

Edward Diskant, the government’s lead prosecutor, meantime, argued that “the coaches at the universities weren’t allowed to be doing this” and there was “no mention” of Self or Pitino ever discussing money.

Court testimony also shows that on Aug. 19, 2017 — days before KU Athletics announced a 12-year contract extension with Adidas — Gassnola texted Self to thank him for helping complete the deal. Self replied via text that he was happy with Adidas and wrote “Just got to get a couple real guys.”

“Coach Self, in T.J. Gassnola’s view, speaks for Kansas, and Kansas wants Adidas to help Kansas recruit,” Schachter said Thursday. “Nike does the same thing for their schools, and if Adidas doesn’t do the same, it’s going to lose its sponsorships to Nike.”

Schachter said in his closing argument that when Self said he was happy with Adidas, he was linking KU’s extension of its agreement with Adidas to “getting a couple of real guys.” Schachter argued the coaches wanted the payments, adding Gatto was trying to help Kansas and Louisville and not defraud them.

”It appears to Jim that this is something colleges are aware of and encourage,” he said. “Kansas today has not canceled Silvio De Sousa’s scholarship.”

Of the former Louisville coach, Schachter said: “Coach Pitino knows exactly why Jim is calling to discuss a player with Coach Pitino.”

Gassnola, who pleaded guilty to conspiracy to commit wire fraud, testified he invoiced Adidas for payments to his New England Playaz AAU team account, then he then used part of those proceeds to pay the families of recruits. Gassnola testified he paid the family of Billy Preston, who was on the 2017-18 KU roster but never played a regular-season game, $90,000.

”Adidas finance was aware that $750,000 was paid out to some AAU team in Springfield, Massachusetts. What does that tell you about whether Jim’s bosses knew about what he was doing?” Schachter said to the jury during his closing argument.

”It is harder to imagine why Jim would think that helping the Adidas colleges compete against the Nike and Under Armour schools, who are doing the same thing, is defrauding them.”

Self, when asked at last week’s KU basketball media day for comment about the federal trial, said: “No I don’t have any response. I can’t talk about that. I’m not meaning to be opaque about this at all. I just feel like … our stance is still the same. We’ll comment when the time is appropriate. The appropriate time is when this is done and that’ll certainly be the case. I’m not going to make comments day to day on what has been said because we’ll know obviously in the next couple weeks what actually this is all about.”

Last week, KU associate athletic director Jim Marchiony said KU Athletics would continue to defer all comment about the federal trial to KU director of strategic communications Joe Monaco. When contacted this week, Monaco referred to a previous KU statement: “It is not appropriate for the university to comment while legal proceedings are ongoing. As we have said all along, the prosecution has not suggested any wrongdoing by the university or its coaches. We will continue to cooperate as requested throughout the trial.”

The jury will start deliberations Monday.

“You saw a spectacular set of closing arguments by some fine lawyers,” Judge Lewis A. Kaplan told the 12-member jury before sending them home for the weekend with the instructions to remain “in a state of sterilization about this case” and not to seek information about it from television, newspapers, social media or other sources.

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