When crime does pay

This is easily my favorite part of the NCAA basketball scandal:

When federal prosecutors announced last September the arrests of 10 men as part of an FBI investigation into the college basketball black market, one of the central figures was Brad Augustine, an Orlando-area youth basketball program director accused of negotiating deals to steer his best players to preferred colleges, for a price.

Augustine agreed to send one player to Louisville, prosecutors alleged in a criminal complaint, after an undercover FBI agent handed him an envelope full of cash meant for the player’s mother. Augustine helped broker a deal to send another player to Miami, as long as an Adidas executive agreed to pay the player’s family $150,000, according to prosecutors, who alleged a coach at Miami later identified as Jim Larranaga had knowledge of the negotiations.

A 32-year-old whose previous legal troubles consisted of traffic tickets and toll violations, Augustine faced a potential prison sentence of up to 80 years on charges including wire fraud and wire fraud conspiracy.

But in February, prosecutors dropped all charges against Augustine, without explanation. Two weeks ago, in a court hearing in New York, one of the lawyers on the case offered a possible reason: After his arrest, Augustine apparently told federal prosecutors he never intended to pay the players and their families, and had kept the little money actually paid out in these deals for himself.

Beautiful.  And absurd.

During a March 22 hearing, however, a lawyer representing Jim Gatto — an Adidas executive accused of agreeing to pay $150,000 if Augustine convinced 1Family star Nassir Little to commit to Miami — discussed the letter in open court.

“Mr. Augustine’s statement as summarized by the government . . . directly contradicts the allegations of the indictment . . . with respect to Mr. Little, Mr. Augustine had no intention of taking any money and handing it to Mr. Little,” said attorney Michael Schachter, according to a transcript.

“Mr. Augustine says that, in fact, he was not in on the scheme. In fact, there was not going to be any payment that was going to be made to Mr. Little. But effectively he was in his own scheme to rip off Mr. Gatto,” said Schachter, who was arguing the judge should force prosecutors to turn over transcripts or FBI agent notes of discussions with Augustine, because they may contain evidence favorable to Gatto and the other defendants.

Seriously, you can’t make this shit up.  It’s like the NCAA has a stupidity virus that infects everyone who comes in contact with its attempt to enforce amateurism.

That federal prosecutors apparently decided to drop charges against Augustine after he told them he hadn’t been brokering deals to steer recruits to specific college programs, but instead had kept money for himself, is a reminder of the unusual legal theory at the core of much of the criminal charges produced so far in the FBI probe.

Fraud is a crime that requires a victim. When Augustine was charged with wire fraud, the alleged victims were Miami and Louisville, prosecutors allege, as the schools could have been sanctioned by the NCAA, and sustained financial penalties, if it had come to light some of their players were profiting from their talents.

“So if the money doesn’t go to the athlete, the FBI and prosecutors are fine with it?” said Andy Schwarz, an economist and outspoken critic of the NCAA’s amateurism rules. “How does that make any sense?”

Sense is optional.

23 Comments

Filed under Crime and Punishment, The NCAA

23 responses to “When crime does pay

  1. 81Dog

    Since when did “absence if a provable crime” mean the same thing as “ok with it”?

    I suppose the feds could still charge Adidas with criminal attempt to commit fraud, but if the street agent kept the money, who did he defraud? You can’t make an enforceable contract to do an illegal thing. Certainly shady, but he apparently cheated a couple of cheaters. It would be like prosecuting some guy who ripped off a weed buyer because the “seller” never had any intention of doing anything but taking the money. It doesn’t mean the law likes weed dealers.

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    • “Provable crime”? LOL.

      Get back to me when somebody in this whole debacle actually goes to jail.

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      • 81Dog

        I didn’t say I thought the feds’ legal theory was brilliant, just pointing out that even under their legal theory, the street guy didn’t do anything illegal. Prosecutors come up with strained legal theories, and also ignore obvious violations, all the time. I’m not a fan of either approach.

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        • Nothing about this investigation makes sense, so I can’t say I have a problem with that final observation.

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          • 81Dog

            there was a case in Muscogee County a few years ago that involved a couple of employees of the Columbus Parks and Recs department (one of whom was the director of the department) and a shadowy Nike rep who lived in Atlanta. The long story short is that the Parks and Recs guys were running an AAU program, using city resources and city employees and frequently city facilities, but the money they generated went into an account the director had opened without telling anyone in the finance department. It was alleged that a couple hundred thousand dollars had been misrouted through this unaccountable, unsupervised, unsanctioned account, much of which had come from the allegedly shadowy Nike guy.

            Despite a great hue and cry from the local DA’s office, the end result was guilty pleas to probation and restitiution ordered of something like 75,000 bucks. Although a dozen or so city employees (some who were supposedly supervising the director of Parks and Recs) tanegentially involved (some by lack of proper oversight), nobody got fired by the director and one or two of his underlings. The Nike guy took a plea on the same terms. Everyone got First Offender status

            Now, in this state, if you commit your fourth misdemeanor shoplifting, it is a felony regardless of the amount shoplifted. Prosecutors here will routinely recommend prison time (not county jail time) for some dumbass who shoplifted a bag of chips at the Piggly Wiggly on a felony shoplifting charge, but if you nick the city for 100 grand plus? It was for the chirren, it’s witch hunt, they meant well, etc. Nobody gets anything but a slap on the wrist, and that’s only if you were directly involved, not if you pulled the Pitino defense (hey, it worked for him the first time) of “I had no idea my employees were doing this stuff.”

            There are a lot of reasons, all speculative for me, as to why none of the Parks and Recs guys who admitted to misappropriating about 100 grand plus never spent a day in jail, but mostly I think it depends on who’s ox is getting gored.

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      • JasonC

        Could the players family sue Augustine for defrauding them in the deal? I understand that by NCAA rules, they shouldn’t be able to receive money from boosters, agents, companies, etc., but by regular law, he promised to get the family money in return for their son’s school choice. I realize there likely wasn’t a formal contract drawn up, but couldn’t the family go after him?

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        • 81Dog

          just my opinion, but no. You cant enforce a contract to do something illegal, and the family apparently never knew he was offering the kid to the high bidder. If the kid went to school and got the scholarship because he wanted to play basketball, not because he and his family thought they were cashing in, they weren’t harmed legally, were they? They cant very well complain that “we got cheated out of an opportunity to cheat,” but YMMV.

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  2. paul

    Ever since it was decided in the North Carolina case that academic fraud is okay as long as everybody gets to participate it’s been human sacrifice, dogs and cats living together – mass hysteria.

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  3. Bulldog Joe

    Following NCAA precedent, as long as no one gives any indication that the player knew about the efforts to collect money, everything is OK. WDE.

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  4. Derek

    You can’t defraud a crook. If you think Adidas should be a victim in a criminal fraud case under these facts then absurdity isn’t really your target is it?

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  5. AusDawg85

    I just want to believe Adidas fired the employees involved and the board of directors has stepped in to punish any senior executives involved plus put controls in place to be sure this never happens again.

    I also want a pony.

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  6. Got Cowdog

    81 gets it. A dude meets someone to sell a little weed and ends up losing the weed and his wallet. What’s he going to do? Tell the cops?
    IMO this is the true gist of the NCAA getting the Feds involved. The NCAA is crying foul, but it’s only a foul to them. “It’s not fair.”
    Instead of updating their MO to capitalize on it (which would include a little sumpin-sumpin for the players) and using a little common sense, in their self-aggrandizing piousness they have dragged in the FBI and the court system and likely will end up costing themselves a boatload of lost revenue, cash due to a court directed payment, their current business model, or hell ALL of the above.
    It will be interesting to see where it ends up.

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    • gastr1

      Getting the Feds involved is apparently what the NCAA does when they can’t enforce their own rules. “Maybe it’s not just one of our rules, but actually a crime! And if it’s not, maybe the threat if it being one will scare everyone into compliance!”

      Real men of genius.

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      • Derek

        If Nike was handing suitcases of cash to street agents to funnel money to players and their families on the condition that they sign with Georgia Tech and Paul Johnson was an active, knowing participant we’d be calling for crucifixion.

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        • Or laughing about how much money Nike was wasting.

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          • Derek

            How does that follow exactly? I’m not saying that a shoe company could get ROI immediately, but there’s no question that if the invested enough they could get there. These kids and their parents like/need/want money.

            Georgia’s Jan Kemp scandal in large part led to a Bobby Ross led “kinda sorta UCF-ish” natty. You don’t think a lot of cash could accomplish similar things?

            The NCAA has little power to uncover or punish these arrangements. Had the fbi showed up in Auburn during scam newton, I would not have complained and neither would anyone around here. They and he walked because no one was around to turn over the rocks to find out how Auburn out bid MSU.

            I think we’d do well not to conflate the concept of fair value for player services and brazen cheating without consequence.

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            • Got Cowdog

              I think the Senator’s argument is that fair (market driven) compensation for player services would at least slow down the brazen cheating. Of course, cheaters gonna cheat, right?

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              • Derek

                There’s are all sorts of regulatory schemes in which people don’t cheat. I can think of no examples.

                I think it’s a straighter line than that for our host. I would describe it as follows:

                Amateurism is wrong and unfair to the labor.

                If it’s impossible to defend or protect, that’s just another reason for it to be abandoned.

                Once there are no (or less) restraints on achieving pay equity, something more fair than the current system will emerge.

                It’s a defendable position. I don’t think the shoe companies and coaches involved in this investigation are “morally” defendable. Maybe criminally defendable. Those are vastly different.

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  7. Hogbody Spradlin

    It sounds like the feds have no problem with Augustine deceiving/defrauding Adidas.

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    • Derek

      Who would?

      Try calling the police to tell them about a guy you invested 40k with and he was supposed to use it to import cocaine. Instead he STOLE it!

      Prosecuting that thief is what would be absurd.

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    • 81Dog

      that comes under the heading of “Play stupid games, win stupid prizes!”

      Adidas cant very well complain that their con didn’t work because they got conned by a better grifter. And besides that, if the kid ended up at the Adidas school, they got what they paid for, didn’t they? No harm, no foul, no lawsuit.

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  8. I’m surprised they did not wait long enough to see if the money ended up on his tax return.

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