Michael Avenatti releases documents alleging Nike paid families of top college basketball recruits

Attorney Michael Avenatti, facing federal extortion charges against Nike, continued to release additional information this weekend against the shoe company that alleges widespread payments to the families of top high school basketball players in a manner that appears, on the surface, to be similar to what caused an Adidas executive and a consultant to be convicted of fraud last year.

The documents allege evidence of approximately $170,000 in cash delivered to people connected to top players, including Deandre Ayton, Bol Bol and Brandon McCoy. Some of that money, the documents allege, was billed to Nike through bogus invoices disguised as business expenses.

Avenatti also suggested on Twitter he had proof Nike was paying Shaondra Sampson, the mother of Zion Williamson, for “consulting services” while Zion was still in high school. The payments, according to Avenatti, came through Nike’s vendor portal and began in 2016.

Williamson is the likely top pick in June’s NBA draft and is expected to garner a massive shoe endorsement deal. He played collegiately at Nike-sponsored Duke.

Avenatti offered no proof of the payments to Sampson but has repeatedly dared Nike on Twitter to prove him inaccurate. The company has not responded to Avenatti and declined to address the specifics of Avenatti’s charges to Yahoo Sports, instead issuing the following statement:

“Nike firmly believes in ethical and fair play, both in business and sports and won’t be commenting further beyond our statement.”

The original statement also encouraged Avenatti to share what he has with the proper authorities.

Avenatti formerly represented Gary Franklin, the longtime coach of a Los Angeles-based AAU team, California Supreme, that Nike sponsored for more than a decade. Avenatti was charged with attempting to extort Nike last month by the U.S. Attorney in the Southern District of New York by seeking about $20 million to not reveal the potentially damaging information via a news conference. Avenatti was also charged with federal tax crimes in a separate case in California.

Avenatti has denied the extortion attempt and at the time said he and his client were interested in uncovering wrongdoing within the company, which had recently declined to renew Franklin’s sponsorship contract. Avenatti said his request for payment from Nike was not a shakedown, but an offer to oversee a massive independent investigation into Nike’s Elite Youth Basketball League (EYBL) to make sure it was complying with the law. He believed Franklin, his client, was a whistleblower.

None of the details in the documents would be particularly surprising to anyone in college basketball. It does, however, potentially impact whether the feds will, if they haven’t already, extend their probe toward EYBL and, in turn, the many high-profile Nike-sponsored college programs.

It also shows Avenatti is not going away because of his indictment and instead is still gathering and leaking via his Twitter feed the very kind of allegations and potential evidence he promised at the cancelled news conference. He said his latest document dump — 41 pages strong — was just “some” of the information he possesses.

He has put his sights directly on Carlton DeBose, the director of the EYBL, for actions that bare similarity to those that ensnared Adidas employees, AAU coaches and college programs.

“Carlton DeBose, a Nike executive, has bribed over 100 high school players over the last four years to play college basketball at colleges affiliated with Nike as opposed to other schools,” Avenatti tweeted Friday night. He used bogus invoices and countless coaches to further the scheme [and] deliver the [money].”

Avenatti also accused Nike of hiding these schemes from federal agents and prosecutors as well as the NCAA.

The documents published by Avenatti on Saturday morning were much more expansive and detailed than the few that Avenatti released on his Twitter feed last week. They include an alleged $83,000 in payments to people affiliated former Arizona star Ayton, allegedly more than $57,000 to those affiliated with former Oregon star Bol and an alleged $30,000 in payments directed toward the purported handler of former UNLV center McCoy. The agents for Ayton, Bol and McCoy did not return requests for comment.

Last October, Adidas executive Jim Gatto and consultant Merl Code were convicted of fraud for funneling Adidas money through AAU coaches and other middlemen to the families of top recruits so those players would play for Adidas-sponsored college teams. Among the key evidence was the existence of fake invoices to Adidas that concealed the true nature of the payments. Gatto was sentenced to nine months in prison and Code, who still must stand trial on separate charges later this month, received six months.

Whether the documents impact what the Southern District of New York has continually declared is an “open investigation” is unknown. So too is the extent of the current investigation.

“The Southern District has gone on record that basketball corruption is a meaningful matter for their office to handle,” said Stephen L. Hill Jr., a partner at Dentons in Kansas City and former U.S. Attorney who prosecuted a similar case against AAU coach Myron Piggie in the early 2000s. “I’d think they’d take a look at any credible information related to basketball corruption, regardless of its source.”

FILE - In this March 25, 2019, file photo, Attorney Michael Avenatti speaks in front of federal court after his initial appearance in an extortion case in New York. Avenatti was arrested Monday on charges that included trying to shake down Nike for as much as $25 million by threatening the company with bad publicity. (AP Photo/Kevin Hagen, File)

Because the original trial centered on Adidas, some of the company’s flagship schools — including Kansas, Louisville and North Carolina State — dealt with direct allegations, significant negative publicity and potential major NCAA penalties. Louisville fired its coach, Rick Pitino, and longtime athletic director, Tom Jurich, by far the highest-profile names to lose job since the case broke.

Mostly spared, though, were Nike-sponsored college programs. Evidence introduced throughout the trial showed Adidas employees and coaches believed Nike was operating in the same manner as Adidas.

“That’s how [it] works at UNC and Duke,” Kansas coach Bill Self texted Adidas AAU coach T.J. Gassnola, who became known as the “bag man” in the case, cooperated with authorities and also pleaded guilty to a felony for wire fraud conspiracy. The two were discussing shoe companies can control recruits and keep top programs and coaches happy.

Self’s point was that Adidas had competition, as it strains credulity to believe they’d be bidding against themselves.Neither North Carolina nor Duke, two of the most prominent Nike-sponsored schools, were mentioned in the documents released by Avenatti.

The evidence in the documents suggests Self’s observation is correct in spirit. The names and alleged money trails of prominent Nike AAU coaches, employees and executives, while needing to verified, sets a clear road map for prosecutors and federal agents that could lead in myriad directions.

It includes an alleged text message exchange, purportedly between Franklin and DeBose where DeBose allegedly explains to Franklin what he should put on an invoice to Nike. In the October 2018 trial, prosecutors hammered Gatto, Code and Gassnola for invoices for payments to player families being disguised as travel expenses. They argued if these acts and payments weren’t illegal, why hide them in what they deemed “sham invoices”? Avenatti has previously tweeted out documents and claims that Franklin, around this time, made what he called a “bag drop” of $10,000 to Ayton’s mother.

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NEW YORK, NEW YORK - JULY 23: Celebrity attorney Michael Avenatti walks out of a New York court house after a hearing in a case where he is accused of stealing $300,000 from a former client, adult-film actress Stormy Daniels on July 23, 2019 in New York City. A grand jury has indicted Avenatti for the Daniels-related case and a second case in which prosecutors say he attempted to extort more than $20 million from sportswear giant Nike. (Photo by Spencer Platt/Getty Images)
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California attorney Michael Avenatti makes a statement as he leaves a courthouse in New York Tuesday, July 23, 2019, as he faces charges accusing him of cheating porn star Stormy Daniels out of $300,000 in a book deal. (AP Photo/Craig Ruttle)
NEW YORK, NY - AUGUST 20: Michael Avenatti attends the 2018 MTV Video Music Awards at Radio City Music Hall on August 20, 2018 in New York City. (Photo by Nicholas Hunt/Getty Images for MTV)
MAY 28, 2019: Michael Avenatti pleads not guilty in federal court in New York City to all charges of theft, extortion, embezzlement and fraud in the Stormy Daniels and Nike, Inc. cases described below. - MARCH 26, 2019: Federal prosecutors in Manhattan, NYC and Los Angeles, CA charged celebrity attorney Michael Avenatti nearly simultaneously in two criminal cases on Monday, March 25, 2019. These complaints allege that Avenatti attempted to extort more than $20 million from Nike, Inc. and that he committed wire fraud and bank fraud. - File Photo by: zz/GOTPAP/STAR MAX/IPx 2019 3/22/19 Michael Avenatti is seen outside Craig's Restaurant in West Hollywood, Los Angeles, CA.
MAY 28, 2019: Michael Avenatti pleads not guilty in federal court in New York City to all charges of theft, extortion, embezzlement and fraud in the Stormy Daniels and Nike, Inc. cases described below. - MARCH 26, 2019: Federal prosecutors in Manhattan, NYC and Los Angeles, CA charged celebrity attorney Michael Avenatti nearly simultaneously in two criminal cases on Monday, March 25, 2019. These complaints allege that Avenatti attempted to extort more than $20 million from Nike, Inc. and that he committed wire fraud and bank fraud. - File Photo by: zz/Dennis Van Tine/STAR MAX/IPx 2018 4/16/18 Michael Avenatti holds a press conference at the Federal Courthouse in New York City following the hearing for President Donald Trump's lawyer, Michael Cohen, at the US District Court for the Southern District of New York State. (NYC)
NEW YORK, NY - AUGUST 20: Michael Avenatti attends the 2018 MTV Video Music Awards at Radio City Music Hall on August 20, 2018 in New York City. (Photo by Nicholas Hunt/Getty Images for MTV)
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Michael Avenatti, lawyer for adult-film actress Stephanie Clifford, also known as Stormy Daniels, speaks to the media outside the U.S. District Court for the Central District of California after a hearing regarding Clifford's case against Donald J. Trump in Los Angeles, California, April 20, 2018. REUTERS/Mike Blake
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THE VIEW - On Tuesday, April 17, Stormy Daniels sits down with the co-hosts of The View (11:00 a.m.-12:00 p.m. EDT) for her first live television interview. Daniels will be joined in studio by her attorney Michael Avenatti. 'The View' airs Monday-Friday (11:00 am-12:00 pm, ET) on the ABC Television Network. (Photo by Heidi Gutman/ABC via Getty Images) JOY BEHAR, STORMY DANIELS, MICHAEL AVANETTI
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NEW YORK, NY - APRIL 16: Adult film actress Stormy Daniels' lawyer Michael Avenatti arrives at Federal Court for the hearing at the United States District Court Southern District of New York related to Michael Cohen, President Trump's longtime personal attorney and confidante, April 16, 2018 in New York City. Cohen and lawyers representing President Trump are asking the court to block Justice Department officials from reading documents and materials related to his Cohen's relationship with President Trump that they believe should be protected by attorney-client privilege. Officials with the FBI, armed with a search warrant, raided Cohen's office and two private residences last week. (Photo by Yana Paskova/Getty Images)
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NEW YORK, NY - APRIL 13: Michael Avenatti, attorney for Stormy Daniels, speaks to reporters following a court proceeding regarding the search warrants served on President Donald Trump's longtime personal attorney Michael Cohen, at the United States District Court Southern District of New York, April 13, 2018 in New York City. Cohen and his lawyers are asking the court to block Justice Department officials from reading documents and materials related to his relationship with President Donald Trump that they believe should be protected by attorney-client privilege. Officials with the FBI, armed with a search warrant, raided Cohen's office and two private residences earlier in the week. (Photo by Drew Angerer/Getty Images)
THE VIEW - Stormy Daniels' attorney Michael Avenatti is the guest today, Monday, 3/26/18 on ABC's 'The View.' 'The View' airs Monday-Friday (11:00 am-12:00 pm, ET) on the ABC Television Network. (Photo by Paula Lobo/ABC via Getty Images) MEGHAN MCCAIN, SARA HAINES, MICHAEL AVANATTI, JOY BEHAR, WHOOPI GOLDBERG, SUNNY HOSTIN
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“Send me an invoice for 60K,” the text reads. “30K line item for 16U, 15U travel expenses, 30K for CA Supreme Back to School Event Sponsorship.” An invoice, dated that same day, June 20, 2016, with those same line items was created.

There was also numerous alleged wire transfer totaling over $115,000 from Franklin’s Bank of America account to American All Star Basketball, a 501 (c) (3) that tax documents tie to Mel McDonald, who had relationships with both Ayton and Bol, among others. Oregon coach Dana Altman said prior to the Sweet 16 of McDonald and Bol: “I know they know each other. What that relationship is, I’m not quite sure.”

McDonald pleaded guilty to a misdemeanor extortion charge in 2013, which included 36 months summary probation and 120 days in custody through a work release program. The judge granted a motion to dismiss in 2016 upon McDonald fulfilling the terms of his probation.

In public filings that cover the two fiscal years between September of 2015 and August of 2017, tax records for All American Basketball show that $732,167 was contributed to the organization, $323,223 the first year and $408,944 the second. The documents claim expenses of $732,248 over that two-year span.

The paperwork doesn’t offer a clear explanation of All American Basketball’s purpose for receiving and spending that money. It states the mission is to “scout and recruit children at the high school level to teach and motivate them in the fundamentals of basketball … The youth are then trained and supported through trainers and coaches and benefit from the safety, security and encouragement of the program.”

According to the documents, alleged payments for McCoy were funneled through San Diego-based grassroots basketball fixture Shaun “Ice” Manning. Attempts to reach Manning for comment Saturday were unsuccessful. A call to McDonald seeking comment was not immediately returned.

The recent barrage of tweets by Avenatti, in the hours leading up to college basketball’s signature event, the Final Four, show the attorney is not letting up, which should not be a surprise. He came into national consciousness as the attorney for a former adult film star who alleged an affair with Donald Trump. Avenatti was a regular on cable news for his brass-knuckle attacks on Trump. Now he is facing his own federal charges, but is apparently continuing to expose, one tweet at a time, some of the information he possesses.

“Nike knew of the illegal payments for years [and] that it involved the highest execs at Nike,” Avenatti tweeted last week. “They purposely hid the info from the NCAA/govt. Any claim by them now that they were cooperating [and] want the info disclosed is bogus. Why didn’t they tell the public the truth/disclose it all?”

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