October is my annual Classic Monster Movie month tribute. I recognize it is not yet October but I wanted to begin a bit early this year as September saw the passing of Basil Gogos. He was the prime illustrator for the magazine Famous Monsters of Filmland, one of my two favorite magazines of my childhood and teenaged years (in case you were wondering, the other was Mad Magazine). According to his New York Times (NYT) obituary “Gogos produced dozens of covers for the horror magazine Famous Monsters of Filmland over more than 20 years. Many looked as if Mr. Gogos had invited the monsters into his studio, where he meticulously lighted them and bathed them in brilliant hues.”

Gogos created many of his paintings from black-and-white still photographs of films made at various studios. Most of his classic creations came from Universal Pictures, which started making monster movies in the 1920s. Some of Gogos most superlative creations include the “bug-eyed King Kong with his mouth agape; the Creature From the Black Lagoon as a red-lipped, amphibious humanoid; Lon Chaney in “London After Midnight” as a top-hatted ghoul with blood dropping from his mouth; and Mr. Karloff as the intense, wrinkled, fez-wearing Ardath Bey in “The Mummy” (1932).”

However, for my money his finest achievement, was his haunting drawing of Karloff as Frankenstein’s Monster, appearing in 1969. The Gogos cover appeared as a part of the magazine’s tribute to Karloff who had died shortly before the issue hit the magazine stands. Gogos’ obit correctly noted that he “imbued Frankenstein’s monster with notable compassion.” Gogos once said of Karloff “A superb facial structure with nicely chiseled planes, deeply sunken eye sockets, high cheekbones, with one side of his jawbone deeper than the other — pure drama.”

Gogos and his innate humanity for Frankenstein’s Monster and all his other creations were lacking earlier this week, when the Department of Justice (DOJ) rocked the National Collegiate Athletic Association (NCAA) and college basketball with an indictment of several college assistant coaches, former Vice President (VP) from the shoe company Adidas, sports agents and financial advisors in a massive corruption scandal. Michael McCain, writing in Si.com, stated “On Tuesday, amateurism entered the crosshairs of multiple federal prosecutions. Ten individuals with deep ties to “big time” college sports have been arrested in three related cases that could rock the foundations of college sports.”

The charges related to paying bribes to college coaches, financial advisors and assorted other hanger-oners as well as high school athletes to steer them towards universities under contract to the shoe company Adidas. According to the DOJ Press Release, “The charges in the Complaints result from a scheme involving bribery, corruption, and fraud in intercollegiate athletics. Since 2015, the U.S. Attorney’s Office for the Southern District of New York and the FBI have been investigating the criminal influence of money on coaches and student-athletes who participate in intercollegiate basketball governed by the NCAA. The investigation has revealed two related schemes. In the first scheme (the “Coach Bribery Scheme”), athlete advisors – including financial advisors and business managers, among others – allegedly paid bribes to assistant and associate head basketball coaches at NCAA Division I universities, and sometimes directly to student-athletes at those universities, facilitated by the coaches. In exchange for the bribes, the coaches agreed to pressure and exert influence over student-athletes under their control to retain the services of the bribe-payors once the athletes entered the National Basketball Association (“NBA”).

In the second scheme (the “Company-1 Scheme”), athlete advisors working with high-level Company-1 employees, allegedly paid bribes to student-athletes playing at, or bound for, NCAA Division I universities, and to the families of such athletes. These bribes were paid in exchange for a commitment by the athletes to matriculate at a specific university sponsored by Company-1, and a promise to ultimately sign agreements to be represented by the bribe-payors once the athletes entered the NBA.”

We have not yet heard from the defendants. However, as McCain noted, they will probably argue that “their conduct merely constituted “business as usual” behavior in 21st Century American college sports. It is no secret bribes have taken place in big-time college sports for years—decades, really. The defendants could assert they could not have “intended” to commit a crime if they engaged in commonplace conduct that, while technically in violation of NCAA rules, often goes without detection.” [Sounds familiar to the FCPA practitioner.]

The University of Louisville has taken a very particular black eye already as one recruit to the school was allegedly offered $100,000 paid through Adidas. The fallout was swift with both the Head Coach and Athletic Director being put on administrative leave, both claiming no knowledge of anything about anything. At least two recruits have pulled out from their commitments to the school.

There is another Foreign Corrupt Practices Act (FCPA) angle as some of the charges include a Travel Act component. This is based on the Travel Act shoe-horning of a federal crime on a state law violation where the actions are inter-state. So, for instance, Auburn University assistant Chuck Person was charged in violating Alabama state law on commercial bribery which says that a person commits commercial bribery if he “Confers, or agrees or offers to confer, any benefit upon any employee or agent without the consent of the latter’s employer or principal, with intent to improperly influence his conduct in relation to his employer’s or principal’s affairs;” [emphasis mine – but that is a pretty low bar]. There have been FCPA charges based on state commercial anti-bribery laws.

The next FCPA angle is around internal controls. Recall that the FCPA has a requirement for effective internal controls and accurate books and records. Adidas needs to determine its exposure in these areas. More than Adidas may be at risk as it was reported that Nike received a subpoena today. It would not be much of a stretch for other apparel companies to receive similar subpoenas.

I know that many of you are shocked, just shocked to find out that college athletes were paid. Nonetheless, I am certain that every university will want this scandal to go away as quickly as possible. The longer this case hangs around the more pillars will fall.

 

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2017

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