The attorney for adidas executive Jim Gatto told a federal court in New York Tuesday morning that her client paid the family of Dennis Smith Jr. $40,000 to secure his commitment to play basketball at N.C. State, Yahoo Sports reported.

Defense attorney Casey Donnelly made the comment during opening statements of Gatto’s fraud trial, where the federal government has charged him in connection with payments to numerous college basketball players in violation of NCAA rules.

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The statement in open court acknowledging the payment to Smith is the strongest evidence yet presented to the allegations that NCAA rules were violated during Smith’s recruitment. The point guard from Fayetteville played one season with the Wolfpack before the Dallas Mavericks selected him in the first round of the 2017 NBA Draft.

Smith has denied the allegations.

Last April, unsealed indictments showed the FBI alleged that the payment from Gatto to a player believed to be Smith was funneled through an as yet unnamed N.C. State assistant coach in October 2015.





Smith was not named in the indictment and is not charged with any crimes. Donnelly’s comment Tuesday was the first time Smith’s name has been explicitly mentioned.

If the payment is found to have occurred, the NCAA could charge N.C. State with violating its recruiting rules. That opens up the school’s basketball program to sanctions.

In response to a request for comment, N.C. State athletic director Debbie Yow issued the following statement:

“We’ve worked tirelessly to establish a culture of compliance and accountability within NC State Athletics. When that culture is threatened we will always act appropriately. If any former employee was involved, they 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 to operate with integrity, winning the right way and succeeding with character. We will continue to fully cooperate with the U.S. Attorney’s Office and keep the NCAA updated throughout this process.”

N.C. State isn’t the only school facing possible NCAA repercussions from Tuesday’s court proceedings in New York.

Yahoo Sports also reported that Donnelly acknowledged Oregon offered recruit Brian Bowen cash before he eventually signed with Louisville.

“Oregon, a Nike school, offered [Bowen] an astronomical amount of money if he’d go to Oregon,” Donnelly said.

Last year, the NCAA ruled Bowen ineligible at Louisville after allegations he was paid $100,000 to sign with the school. Bowen later transferred to South Carolina but never played and left for pro basketball without having his eligibility reinstated by the NCAA.

North Carolina freshman Nassir Little’s name came up when Donnelly said evidence will show that Arizona offered to pay $150,000 to secure his commitment to play for the Wildcats. Gatto, she said, was involved in a conversation about paying Little $150,000 to attend Miami because Gatto was asked to match Arizona’s offer.

LIttle and his family have denied any connection to the case.

Donnelly also said that Gatto paid recruit Silvio De Souza $20,000 before he signed with Kansas, an adidas-sponsored school just like N.C. State and Louisville. She said Gatto only paid De Souza the money after Under Armor had paid him an undisclosed amount of cash to attend Maryland, which Under Armor sponsors.

Gatto, fellow adidas employee Merl Code and Christian Dawkins are charged with wire fraud.

According to the Associated Press, attorneys for Gatto and Code acknowledged Tuesday their clients broke NCAA rules by steering cash to prospective college stars.

Attorney Mark Moore, who represents Code, said his client is intimately familiar with the practice of shoe companies sponsoring schools and athletes. A former Clemson basketball player, Code worked for Nike before joining Adidas.

Moore explained in court Tuesday how coaches from top college programs relied on shoe companies to provide money to the families of top recruits

“Nobody was dumb enough to do this in the open and wave it in front of the NCAA,” Moore said, according to the Associated Press.



