In March, famed attorney (and nemesis to Donald Trump) Michael Avenatti raised eyebrows when he sent a tweet vowing to expose Nike by holding a press conference for what he alleged was "a major high school/college basketball scandal."
Less than an hour after Avenatti sent that tweet, he was arrested by the federal government and charged with extortion against Nike to the tune of $25 million.
The story hit its next stage, with illuminating allegations, Wednesday night when Avenatti's legal team filed a motion to have his extortion charges dismissed.
Within that motion comes a lot of background for the case, which includes heavy accusations against Nike's Elite Youth Basketball division. Avenatti claims Nike was knowingly involved in nefarious behavior of illicit payments for parents and/or guardians of high school basketball players. The filing on behalf of Avenatti's legal team, however, did not provide evidence of payments to any high school players or their families/representatives.
Former Arizona center Deandre Ayton, former Oregon center Bol Bol and former UNLV forward Brandon McCoy have been distinctly attached to this potential scandal. From Avenatti's team's court filing, here are money amounts alleged to have been made from Nike to people connected to players who were in high school at the time:
- $30,000 payment to Deandre Ayton's handler, Mel McDonald
- $10,000 in cash to Ayton's mother
- Travel expenses for Ayton's family
- $10,000 check to Brandon McCoy's handler, Shaun Manning
- $5,000 in cash to McCoy's handler, Shaun Manning
- $29,528 wire transfer to Bol Bol's handler, Mel McDonald
- $12,500 wire transfer to McDonald
There is also alleged communication from within Nike that powerful employees had approved plans to potentially pay the families of then-high schoolers Romeo Langford and Zion Wiliamson (and a third player, who is not identified because he is a minor).
From the motion:
Jamal James texted DeBose and Nike Recruiting Coordinator John Stovall in February 2017, asking whether they would be "willing to do … whatever may be needed for the Zion/Romeo situations as well as the money we're now going to do for the [minor] kid in Michigan," to which Stovall responded
Langford – 20
Zion – 35 plus
[minor] – 15.
Debose responded that he was willing to pay Langford, Zion and [minor] the $70,000 and that they should "stay aggressive" while he got "creative" with the budget.
Nike provided a statement late Wednesday night, first publicly provided by The Action Network: "Nike will not respond to the allegations of an individual facing federal charges of fraud and extortion. Nike will continue its cooperation with the government's investigation into grassroots basketball and the related extortion case."
Federal prosecutors allege Avenatti was trying to profit off Nike's dirty laundry lest it didn't own up to its alleged, numerous misdeeds and proceed with an inquiry and settlement that was sought by a former youth basketball coach who ran a Nike-funded grassroots program for a decade.
That coach, Gary Franklin, is at the crux of the matter. He ran the Nike-funded California Supreme from 2006 until a decade later. Franklin became increasingly frustrated with some of Nike EYB's most influential employees, to the point where he sought potential legal ramifications unless the company cleaned house.
The motion filed Wednesday in New York federal court brings about severe accusations against Nike employees Carlton Debose, John Stovall and Jamal James. The motion includes alleged documentation between Debose and a high-ranking Nike executive in which Debose claimed he "was willing to bet" that Nike had to pay "38 of 40 teams in the EYBL" a "moderate ransom" because of payments to players' families.
Franklin apparently sought justice and for Nike to purge its EYB arm of Debose and James, primarily, but others who were willing to knowingly violate NCAA rules to increase the player power for dozens of Nike-sponsored teams on the EYBL circuit. Franklin claims he was pressured by Nike's EYB executives into breaking NCAA rules and creating phony invoices to mask payments.
"They successfully pressured him to allow two other individuals (Bol Bol's handler Mel McDonald and a California lawyer named Bryan Freedman) to take over the California Supreme '17U' team in order to deter McDonald from steering Bol Bol to an Adidas-sponsored team," the motion says.
Debose is the director of Nike EYB and can be seen every July at Peach Jam prominently strolling around the premises, shaking hands with Division I coaches and monitoring the biggest and most glamorous event on the recruiting calendar.
"To be sure, Nike executives knew that Coach Franklin's claims were true inasmuch as internal text messages and e-mails possessed by Nike contain admissions by Nike executives that they were funneling money to the families of high school players, and the invoices and bank statements shown to the Nike lawyers by Mr. Avenatti corroborated those payments," Avenatti's motion alleges.
It continues: "Specifically, Nike possessed text messages, e-mails, and other documents from 2016-17 -- before it received the grand jury subpoena from the USAO-SDNY -- proving that Nike executives had arranged for and concealed payments, often in cash, to amateur basketball players and their families and 'handlers.'"
There are NCAA rules that allow for shoe companies to pay family members or guardians of prospects, if those family members or guardians are seen as legitimately running a grassroots basketball team. One such recent example of this within Nike is Marvin Bagley Jr. doing so when his son, future No. 2 draft pick Marvin Bagley III, was in high school. In regard to potential payments for Langford, Wiliamson and the unnamed minor from Michigan, context is lacking as to whether or not Nike was seeking a legitimate in for those players, like it did with the Bagleys. After all, Langford's father and Williamson's stepfather did both coach their respective children's teams on the Adidas circuit.
But Avenatti -- who has vehemently maintained his innocence in this matter of extortion -- has also sent multiple tweets alleging that Nike had been paying high school players and/or their families. He insinuated that Nike provided Williamson's mother with money, this despite the fact that Williamson played much of his high school grassroots career on the Adidas circuit. He's vowed to expose Nike for its alleged crooked business practices -- essentially putting the NCAA eligibility of an untold number of college-bound players at risk.
The accusations at hand here are not that different from what Adidas and its former employees and/or advisers went through in two federal trials, both of which brought multiple guilty pleas and subsequent prison sentences, including putting two former. But whereas Adidas was put through the wringer, Nike avoided federal prosecution.
Avenatti has been aggressive and vocal in his innocence in the matter, including claiming the charges stem from his clashes with Trump in the filing. The 48-year-old attorney, who rose to national prominence for his representation of porn star Stormy Daniels in her legal clash with Trump, has other charges affixed to him out of California including fraud, perjury and tax evasion. He is facing decades in prison if found guilty on all charges in multiple cases.