Former Adidas consultant testifies he gave $40,000 to former NC State coach Orlando Early

Orlando Early, a former N.C. State assistant basketball coach, accepted tens of thousands of dollars and helped funnel it to the family of Dennis Smith Jr. to secure the basketball player’s commitment to the Wolfpack, Thomas “T.J.” Gassnola, a former Adidas America consultant, testified in federal court in New York on Thursday.

“I gave Orlando Early $40,000 to give to the family of Dennis Smith,” Gassnola said.

Gassnola has pleaded guilty to wire fraud and agreed to testify for the federal government in its fraud case against James Gatto and Merl Code, two former Adidas employees, and Christian Dawkins, an agent runner. Gassnola told the court he flew to North Carolina in 2015 and delivered the cash to Early at the coach’s request.

“In the fall of 2015,” Gassnola testified, “Orlando Early reached out to me that there was some issues surrounding Dennis and the people around him. There were certain things that were promised to the family, from who I don’t know, but there was a lot of minutia around it, and he just seemed to be uncomfortable and he was having some issues with keeping that situation together.”

The money, Gassnola testified, was to be passed from Early to Shawn Farmer, Dennis Smith Jr.’s personal trainer, and on to Dennis Smith Sr., the player’s father. Gassnola described Farmer in court as the “go-between” for Adidas and the Smith family.

“I offered to bring him $40,000 to calm the situation,” Gassnola said. “Just make it easier, keep people happy.”

Gassnola said he asked Gatto, a former Adidas executive, for the cash and then traveled to North Carolina on Nov. 1, 2015, to make the payment. The payment to Early, Gassnola testified, was made the next day.

Gatto’s defense attorney Michael Schachter, however, presented evidence that the money came from Andy Miller, an agent whom N.C. State disassociated itself from in 2012. The defense showed documentation of a wire transfer from Martin Fox, a colleague of Miller’s, to Gassnola on Oct. 20, 2015. In July 2011, Sports Illustrated published a story listing Fox as an “adidas ‘Grass Roots Director of Houston’ and Houston Select staffer” who had been “scammed out of” $249,000 “by the late Houston-area money manager and AAU operator David Salinas.”

N.C. State sent a letter to Miller, who owned ASM Sports, on Sept. 19, 2012 disassociating him from the Wolfpack program for at least 10 years. He was not allowed to contact any N.C. State student-athletes or offer them any benefits or inducements.

Gassnola said earlier in his career, in 2004 and 2005, he had been paid $1,500 a month to recruit players for Miller.

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A receipt for Gassnola’s plane ticket for travel from Hartford, Conn., to Raleigh on Nov. 1 , 2015 was entered into evidence on Thursday.

Gassnola ran the New England Playaz summer-league basketball team, which was sponsored by Adidas. He said he withdrew the money from the team’s account and was subsequently reimbursed by Gatto.

Gassnola was asked in court what the $40,000 withdrawal from the Playaz account was for.

“It was a payment to Dennis Smith’s family,” Gassnola said.

Gassnola said he met Early at his house in Raleigh to give him “cash in an envelope.” The transaction happened at Early’s house because he wanted to conceal it from N.C. State, Gassnola testified.

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Gassnola also testified that he did not discuss the payment with anyone else at N.C. State, including compliance officials.

“Coaches would have got fired and Dennis would have been deemed ineligible,” Gassnola testified.

A first payment to the Smiths

The $40,000 payment was the second one Gassnola had made to Smith, he said. The first, he testified, was made when Smith was a junior at Trinity Christian School in Fayetteville. It’s unclear how much the first payment was for. Gassnola said that payment was to keep Smith from transferring from his Team Loaded grassroots Adidas-sponsored basketball program to a program sponsored by Nike. Smith’s father was the Team Loaded coach.

“Andy Miller reached out to me and told me he had knowledgeand a relationship with somebody in Dennis’s family; thatDennis was considering moving grassroots labels and was goingto go from an Adidas team to a Nike team, and that the familyneeded some money to stay. So I relayed that conversation toChris Rivers at Adidas,” Gassnola testified Thursday.

Rivers was the head of grassroots basketball at Adidas.

Smith played one season at N.C. State, in 2016-17, before the Dallas Mavericks drafted him in the first round of the NBA Draft. Despite Adidas’ efforts to secure him, he signed an endorsement deal with rival shoe company Under Armor, which left Gatto disappointed.

“I felt we had done nothing but good for Dennis Smith and his family over time. Jimmy went beyond the call to sign that kid,” Gassnola testified.

No knowledge of payments

N.C State compliance director Carrie Doyle testified Tuesday and Wednesday that she had no knowledge of the payments made to the Smith family, which are a violation of NCAA rules. She said had the school known of them, Smith would not have been offered a scholarship.

Smith signed his national letter of intent with N.C. State on Nov. 11, 2015. The following month, on Dec. 17, 2015, he signed the required documents to certify his eligibility that allowed him to receive funds under his scholarship agreement with the school.

According to documents entered into evidence, one of the documents stated, “You have reported to the director of athletics or his or her designee of your institution any violations of NCAA regulations involving you and your institution.

“You affirm that you understand that if you sign this statement falsely or erroneously, you violate NCAA legislation on ethical conduct and you will further jeopardize your eligibility.”

Doyle testified that, in the eyes of the NCAA, it didn’t matter whether Smith Jr. knew or didn’t know about the payments to his family when he signed the document attesting to his amateur status.

Gassnola testified on Wednesday that he made payments to the families of five players, including Smith, former Kansas player Billy Preston, current Kansas player Silvio De Sousa, former Louisville player Brian Bowen Jr. and former Arizona player DeAndre Ayton.

Nassir Little

Current North Carolina freshman Nassir Little’s name surfaced on Thursday as Gassnola talked about efforts to get him to sign with Kansas, Arizona or Miami.

Gassnola testified that Kansas, an Adidas school, had no interest in Little so “it was between the University of Miami and Arizona.”

Dawkins told Brad Augustine, Little’s coach for the 1-Family Adidas-sponsored summer-league team in Florida, about the $100,000 payment made to get Bowen to sign with Louisville. According to Gassnola, Dawkins told Augustine that Little could get the same payment.

Gassnola was angry that Dawkins spread the details to Augustine.

Arizona has a sponsorship agreement with Nike, while Miami is an Adidas school.

In a recording of a wire-tapped phone call played in court on Thursday, Dawkins told Augustine, “You’re in a contract here. The best thing to do is send the kid (Little) to an Adidas school.”

The effort to get Little to sign with an Adidas school also included Rivers, the Adidas executive.

Copies of text messages between Code and Gatto from Aug. 11, 2017, entered into evidence on Thursday, show Code said, “Miami wants a kid Nassir Little.”

Gatto replied that he would meet with Rivers about it.

Code said Augustine told him Little “needs some assistance in the same way we were assisting Bowen.”

Code added that, “The problem is Arizona offered the kid 150 (thousand dollars) and we are trying to keep him from going to one of their schools (Nike).”

The FBI’s investigation went public on Sept. 26, 2017, and Code, Gatto and Dawkins were among 10 who were arrested.

Little originally committed to Arizona but, after the scandal broke, signed with North Carolina. His family has denied receiving any payments as part of the scheme and signed sworn affidavits in Oct. 2017. No evidence has been presented in the case showing any involvement by Little, his family or Arizona.

On Friday, UNC officials declined to say whether or not Little is eligible to play for the Tar Heels. Little, however, has been practicing and did play in two games in the Bahamas in August.

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Dennis Smith Jr. and ASM Sports

A document in a February Yahoo report shows that Smith Jr. allegedly owed $73,500 to ASM Sports, the agency owned by Miller, the agent disassociated from N.C. State. A second document, dated Dec. 31, 2015, showed Smith receiving a $43,500 loan.

The money was allegedly paid out in hopes of Smith signing with ASM. The documents also had notes on how the money could be recouped if Smith went with another agent. Smith ultimately hired Glenn Schwartzman of Paramount Sports and Entertainment as his agent when he reached the NBA.

In February, N.C. State athletic director Debbie Yow in a statement said the school had no knowledge of any payments to Smith prior to the Yahoo report.

Gassnola is expected back on the stand when the trial resumes on Monday.

When reached for comment about Gassnola’s testimony on Early on Thursday, N.C. basketball officials referred to a statement from athletic director Debbie Yow: “We’ve worked tirelessly to establish a culture of compliance and accountability within NC State Athletics. When that culture is threatened we will always act appropriately. If any former employee was involved, they knew they were breaking the rules and chose to keep it hidden. We have no tolerance for those who would choose to damage the reputation of this great university. NC State will continue to operate with integrity, winning the right way and succeeding with character. We will continue to fully cooperate with the U.S. Attorney’s Office and keep the NCAA updated throughout this process.”

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