Nike unaware of alleged illegal payments to elite high school basketball players

Lawyer Michael Avenatti is on trial in New York on charges he tried to extort as much as $25m from Nike by threatening to reveal allegations of bribery by company executives

A woman pushes her bike next to the flagship store of sporting-goods giant Nike in Shanghai in March 2017. Photograph: JOHANNES EISELE/AFP/Getty Images

A woman pushes her bike next to the flagship store of sporting-goods giant Nike in Shanghai in March 2017. Photograph: JOHANNES EISELE/AFP/Getty Images

 

Nike was unaware two of its executives may have made illegal payments to elite high school basketball players until celebrity lawyer Michael Avenatti raised the allegation, a lawyer for the company testified.

Avenatti is on trial in New York on charges he tried to extort as much as $25 million (€22.6 million) from Nike at a March meeting by threatening to reveal allegations by his client, coach Gary Franklin, that two company executives bribed his athletes to attend Nike-sponsored college programmes.

Scott Wilson, a lawyer for Nike with the firm of DLA Piper, said Monday under cross-examination by Avenatti’s attorney that an internal corporate probe had not uncovered alleged payments by the executives, Carlton DeBose and Jamal James, and the company first heard of them when Avenatti produced text messages, emails and other evidence at the meeting.

Nike, based in Oregon, has denied wrongdoing. DeBose and James, who both still work at the footwear giant, have denied involvement in making any corrupt payments. The men are also fighting subpoenas by Avenatti for their testimony at the trial.

Wilson said his law firm at the time, Boies Schiller Flexner, had interviewed DeBose and James and told federal prosecutors - who’ve been investigating bribery in college sports since at least September 2017 - it found no evidence of corrupt payments.

“That wasn’t information we had so it was not information we presented” to the government, Wilson told the jury. He said Nike gives investigators additional information as it becomes available. The government probe is ongoing.

Wilson reported Avenatti’s demand to federal prosecutors and wore a wire at a subsequent meeting to gather incriminating evidence. Avenatti has denied wrongdoing and says he asked Nike to hire him to conduct a new internal probe for as much as $25 million as a legitimate negotiation tactic. -Bloomberg