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In timeline released Tuesday, NC State details its response to federal hoops probe

April 17, 2018

North Carolina State University released a timeline Tuesday detailing its response to the widening federal probe into college basketball, including what ties the school’s basketball program and former hoops standout Dennis Smith Jr. may have to the ongoing investigation.

Chancellor Randy Woodson said NC State has worked “proactively” to search for and report relevant information since the U.S. Attorney’s Office announced a series of complaints in September against Adidas, several college basketball programs and top prospects.

Woodson said NC State’s general counsel and athletics compliance staff contacted current and former basketball coaches in response to the initial federal complaints “asking whether they had any knowledge or involvement related to the allegations coming from the U.S. Attorney’s Office. All stated they had neither any knowledge of nor involvement in the subject matter related to the FBI’s investigation.”

The school also detailed a number of communications it had with a sports agent in October and November of 2017.

According to Woodson, the school’s general counsel spoke with a Wilmington-based agent on Oct. 19 who said that he believed Dennis Smith Jr. attended NC State due to “influence by Adidas through Dennis Smith Sr.”

The agent didn’t provide the school any information about other individuals potentially involved, but NC State conducted a full interview with the agent and sent those findings to the Raleigh FBI office, which sent it to the Southern District of New York.

The agent, Gary Shipman, told WRAL News Tuesday afternoon that his “impressions” of college basketball led him to contact the school.

“I never witnessed (players being paid), but coaches that were not involved but knew it was going on and were the ‘losers’ believed it to be rampant,” Shipman said.

Shipman said he contacted NC State about Smith not long after the federal charges were announced.

“I thought I should convey those impressions, for whatever purpose they served, to those at NC State,” Shipman said.

Last week, a superseding indictment filed in the investigation accused James Gatto, Merl Code and Christian Dawkins of facilitating payments to the families of six student-athletes, including Smith, to ensure those players would attend four schools – North Carolina State University, the University of Louisville, the University of Miami and the University of Kansas.

The court papers portrayed Gatto, a former executive for Adidas, and some coaches as bad actors, saying the conspiracy included hiding payments and signing forms falsely asserting that no payments had been made.

The indictment accuses Gatto of helping facilitate payments to the family of Dennis Smith Jr. to ensure the top prospect remained committed to the Wolfpack in 2015.

It also alleges that a coach at NC State helped get money from Gatto’s company to Smith’s family.

The coach, labeled Coach-4 in the indictment, is not identified by name, but the indictment said the coach said in or around October 2015 that Smith was “not happy with his decision to attend NC State and was considering de-committing before the 2016-17 college basketball season.”

“Accordingly, and to secure the student-athlete’s willingness to remain committed to the university, Gatto and CC-3 agreed to make a payment of $40,000 to Coach-4, which Coach-4 would in turn deliver to Parent-1,” the indictment says.

Investigators allege that the money was delivered to Coach-4 in North Carolina shortly after. In December 2015, Smith signed a financial aid agreement to play at NC State.

Smith, a Fayetteville native, came to NC State as one of the most highly touted players in his high school class. He played just one year for then-head coach Mark Gottfried before leaving for the NBA. Smith was a first-round draft pick of the Dallas Mavericks.

NC State said last week that it focuses “significant effort” on educating student-athletes, coaches and employees about NCAA regulations.

Woodson reiterated that in his statement Tuesday, saying he was pleased with how the school’s general counsel has handled the process since last fall.

“I’m also pleased with the culture Athletic Director (Debbie) Yow has established at NC State. She has led an intentional and consistent emphasis that all NCAA rules and regulations are always to be followed by all coaches, staff and student-athletes,” Woodson wrote.

“If the allegations from the superseding indictment are proven true, any former employees involved 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.”

Debbie Yow issued a statement of her own Tuesday afternoon, doubling down on NC State’s “proactive” effort to be transparent during the process and highlighting the work the athletic department does to “establish a culture of compliance and accountability.”

“There has been an intentional, consistent emphasis regarding the expectation that all NCAA rules and regulations be followed by all athletics coaches and staff. We provide ongoing education in this area and go to great lengths to reinforce a culture of compliance,” Yow said. “As we continue to cooperate in this investigation, we have encouraged our coaches and staff to focus on their excellent commitment to our student-athletes and university.”

Michael McCann, the associate dean of the University of New Hampshire School of Law and legal analyst for Sports Illustrated, told WRAL last week he expects the NCAA to at some point take a look at all of the schools implicated in the federal probe.

“I don’t think there will be immediate action against the schools,” McCann said. “The NCAA is cautious here because the NCAA itself could potentially be implicated depending on where the evidence goes. There are a lot of things we don’t know about what’s going on with the FBI and what they’re looking into.”

McCann said implicated programs could be at risk for NCAA sanctions, especially if members of the programs knowingly helped shoe companies skirt NCAA rules.

“Eventually, NC State could be looking at potential penalties that could go at vacating wins possibly or the loss of scholarships, sort of traditional penalties,” McCann said. “But I think the NCAA is going to be cautious because this is already a criminal case. They don’t want to get involved until there is more clarity in terms of what’s going to happen. In all likelihood the criminal prosecution will take years.”

NCSU: Response to subpoena included search of records, contact with NCAA

NC State’s timeline also detailed the school’s contact with the Assistant U.S. Attorney for the Southern District of New York regarding a grand jury subpoena filed in January that asked the school to provide emails, text messages, calendar entries and other records “related to the recruitment and enrollment of Smith Jr. and personnel files for Gottfried and (assistant men’s basketball coach Orlando) Early.”

Woodson said the school began collecting those records in late January. About two months later, the school released the subpoena against the advice of the court.

The university said in a statement that it was being made public “after receiving media requests” and in accordance with North Carolina’s Public Records Act.

Fred Demarest, NC State’s senior associate athletic director, said current head coach Kevin Keatts and the rest of his staff did not know about the subpoena.

Keatts became NC State’s head coach last spring after Gottfried was fired.

Gottfried followed Smith to the Mavericks, where he was an assistant coach for the 2017 NBA Summer League team, and he was named last month as the new head coach at Cal State-Northridge.