Adidas has found itself in hot water following the arrest of James “Jim” Gatto, its director for global sports marketing for basketball. This follows a news release from the U.S. Department of Justice which reported the arrest of 10 individuals for their involvement in college basketball fraud and corruption schemes. This included coaches, executives, advisers and several "affiliated" with the company.
While the news release from the U.S. Department of Justice did not explicitly identify adidas as the company muddled in the scandal, it did cite Gato's involvement. In a statement to Reuters, an adidas spokesperson said the company would fully cooperate with authorities to understand more. However, it was unaware of any misconduct.
The individuals were arrested for a scheme to pay high school basketball players or their families for commitments by those players to attend and play for an adidas-sponsored university, and to sign with the company upon turning professional. The report added that in or around 2017, those arrested agreed to pay bribes to at least three high school basketball players or their families.
This was through a scheme funnelling US$100,000 from adidas to a family of an elite high school basketball player so he would enrol at an adidas-sponsored school. The basketball player was also to sign with adidas upon embarking on his professional career and joining the NBA, according prosecutors in the U.S. Department of Justice release.
Marketing has reached out to adidas for comment.
In 2012, adidas filed a criminal complaint against former executives of its Reebok India subsidiary. According to FT, this was for their connection with an alleged fraud case involving millions of dollars. This followed the discovery of irregularities found in its commercial performance of a potential €125 million.