Indictment implicates NC State, Dennis Smith Jr. in college hoop corruption case

Smith, is alleged to have been paid “approximately $40,000” in September 2015 after having second thoughts about his commitment to the Wolfpack

Christine T. Nguyen—The North State Journal
Former NC State coach Mark Gottfried gives instructions to Dennis Smith Jr. during a game in 2016-17 (Christine T. Nguyen/North State Journal)

NC State has been directly implicated in the ongoing federal investigation into corruption in college basketball recruiting, according to an indictment handed down Tuesday by the U.S. Attorney’s Office for the Southern District of New York.

Although no one associated with the Wolfpack was indicted along with sports agent Christian Dawkins and Adidas executives James Gatto and Merl Code, all of whom were arrested on earlier charges last November, an unnamed coach and a player believed to be Dennis Smith Jr. were specifically mentioned in the allegations against the trio.

In addition to State, fellow Adidas schools Miami, Louisville and Kansas were also implicated by name in connection to illegal payments to prospective recruits.

State’s involvement is anything but a surprise.

According to a report by Yahoo Sports published on February 23, Smith’s name is included on a spreadsheet obtained by authorities itemizing payments to players from schools across the country. Smith appears on the list for having received payments or loans totaling $73,500 while he was still in high school.

Then on March 9, a grand jury in New York issued a subpoena ordering State to provide records pertaining to the case against Dawkins, Gatto and Code.

This latest, superseding indictment “expands the scope of the charged wire fraud conspiracy to include alleged payments to the families of six student-athletes in connection with those players decisions to attend four different NCAA Division I universities.”

The allegation involving State stems from a payment of “approximately $40,000” in September 2015 from the shoe company to Smith, who was recruited by former coach Mark Gottfried, played one season with the Wolfpack and is now a member of the NBA’s Dallas Mavericks.

The indictment states that the payment was a means of convincing Smith to honor his commitment to play for State after the five-star recruit from Fayetteville began to have second thoughts about his decision.

In order to get Smith to stick with the Wolfpack, money was allegedly withdrawn from an account controlled by Gatto and delivered to the unnamed coach, who then paid it to Smith’s father. Smith, who was rehabbing from knee surgery at the time, subsequently enrolled at State in January 2016.

Gatto, Smith and his father are also accused of making false statements to the NCAA and State athletic officials regarding known rules violations. Although Smith and his father were not named in this latest indictment, their actions have the potential to expose State to some serious NCAA sanctions.

Athletic department spokesman Fred Demarest issued a statement Tuesday acknowledging the indictment while adding that Gottfried and his former assistants have been contacted by State’s compliance office in response to their involvement with the allegations.

“In September 2017, the U.S. Attorney’s Office announced a series of complaints against Adidas, several basketball programs and top prospects,” the statement said. “In response, NC State’s Office of General Counsel and Athletics’ Compliance staff contacted former basketball coaches asking whether they had any knowledge of or involvement in any activity related to the allegations coming from the U.S. Attorney’s Office. Former staff questioned stated they had neither any knowledge nor involvement.

“NC State will continue to fully cooperate with the U.S. Attorney’s Office and keep the NCAA updated throughout this investigation.”