Second Circuit Affirms Convictions in College Basketball Bribery Scandal

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On June 4, the U.S. Court of Appeals for the Second Circuit issued a decision upholding the bribery convictions of two defendants in the college basketball scandal that garnered a significant amount of media attention in 2019. The defendants, Christian Dawkins and Merl Code, participated in a scheme in which they bribed coaches of NCAA Division I basketball teams to steer their players toward Dawkins’s sports management agency when the players left college basketball to play professionally.

The Second Circuit’s decision gives a broad construction to the “federal programs” bribery statute, confirming that federal prosecutors may charge with a federal crime anyone who offers a bribe to any employee of a university that receives federal funding, even where the bribe has nothing to do with the program receiving federal funding and involves a non-commercial program of the university. This case may become important in the ongoing Varsity Blues prosecution.

Background

Defendants Dawkins and Code were charged with a variety of crimes, including federal programs bribery and conspiracy to commit “honest services” wire fraud. The jury only convicted them, however, on the charges of substantive bribery and conspiracy to commit bribery under 18 U.S.C. § 666 (federal programs bribery). The relevant portion of this statute prohibits “certain actions taken ‘with intent to influence or reward an agent’ of a designated recipient of federal funds, ‘in connection with any business’ of that recipient.” Dawkins was subsequently sentenced to one year and one day in prison, while Code received a sentence of three months.  Both appealed.

Summary of Second Circuit’s Decision

The Second Circuit upheld the convictions, refusing to adopt the defendants’ narrower definitions of “agents” and “business” under the statute. First, the court rejected the defendants’ argument that only individuals with the ability to access or direct the spending of federal funds or who were associated with a department of the university that received federal funds, could be considered “agents” under § 666. The court relied on precedent from the Supreme Court, which rejected two similar attempts to build a nexus requirement into the language of § 666 in Sabri v. United States, 541 U.S. 600, 605 (2004) and Salinas v. United States, 522 U.S. 52, 61 (1997). Instead of narrowly construing the statute, the court adhered to the plain meaning of the text and adopted a broad interpretation that considered the bribed coaches to be agents under § 666 because they were university employees.

Second, the court rejected the defendants’ argument that the term “business” in the statute only applied to commercial activity and not the operation of a college athletic program. The court, noting the lack of limiting language in the statute and citing several analogous cases from other circuits, affirmed the district court’s jury instruction that “business…includes intangible aspects of the business of the organization.” The court accordingly concluded that the operation of a university’s basketball team was “business” under the statute.

How Do These Decisions Affect the Varsity Blues Scandal?

The Second Circuit’s opinion may have an application to the ongoing prosecutions in the Varsity Blues scandal pending in the U.S. District Court for the District of Massachusetts. In Varsity Blues the government alleges, among other things, that defendant parents made payments to college athletic programs in exchange for the admission of their children as recruited athletes.

The parents in Varsity Blues have been charged with federal programs bribery under 18 U.S.C. § 666, and honest services fraud, just like Dawkins and Code. The Second Circuit’s opinion here may be instructive to the district court as to the bribery counts against the Varsity Blues defendants. However, because Dawkins and Code were acquitted of honest services fraud, there was no occasion for the Second Circuit to make a legal ruling on that count. While many of the defendants in the Varsity Blues scandal have pleaded guilty (and served their sentences), the trial for the remaining defendants is set for November of 2021.

The author would like to acknowledge the contribution of summer associate Toyin Edogun.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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