University of Kansas

Jim Gatto to pay KU about $200,000 in restitution; school had requested $1.1 million

Former Adidas executive Jim Gatto has agreed to pay the University of Kansas restitution, after the school claimed it had suffered financial harm as a “victim of Mr. Gatto’s and his co-conspirators crimes” involving payments to basketball recruits.

The exact amount KU will receive from Gatto is unknown but appears to be roughly $200,000 based on court documents filed Monday. The total paid to KU, North Carolina State and Louisville combined will be $342,437.75; KU will get $161,574 for legal fees, while NC State is getting $79,026.75. The rest of the $101,837 is being used to reimburse the schools for scholarships given to ineligible student-athletes.

Gatto, along with former Adidas consultant Merl Code and former sports agent Christian Dawkins, were found guilty on all seven federal counts of wire fraud and conspiracy to commit wire fraud on Oct. 24, 2018. However, Gatto was the only defendant charged in connection with KU; his former associate T.J. Gassnola testified he paid the family of former KU player Billy Preston $89,000 and the guardian of current Jayhawks player Silvio De Sousa $2,500.

Preston never played for KU while his eligibility was investigated. De Sousa has been suspended by the NCAA for two seasons, with KU still appealing that ruling.

The amount KU will receive in restitution from Gatto is much less than what William Sullivan Jr., an attorney for KU, asked for in his original request in a victim impact statement to U.S. District Judge Lewis Kaplan dated Feb. 22. At the time, KU was seeking an award of $1,136,424.52, with the school seeking damages that included:

• $112,731.52 for the athletic scholarship and financial aid KU paid for Preston and De Sousa made under false pretenses

• $289,886 for fees related to responding to the U.S. Justice Department subpoenas sent to the school

• $78,942 for preparing KU senior director of compliance Jeff Smith in his role as a witness at the federal trial, and also for the school having outside counsel present during select portions of the three-week proceedings in New York

• $308,472 for investigating Gatto’s misconduct as it related to KU

• $346,393 for legal fees incurred by outside counsel to respond to the NCAA’s investigation of Preston and De Sousa

Louisville and NC State originally asked for smaller restitution amounts than KU; Louisville requested $31,922.75, while NC State asked for $258,585.

Monday’s agreement between Gatto and the government agreed to only reimburse the schools, in part, for legal fees and student-athlete scholarships.

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Jesse Newell — he’s won an EPPY for best sports blog and previously has been named top beat writer in his circulation by AP’s Sports Editors — has covered KU sports since 2008. His interest in sports analytics comes from his math teacher father, who handed out rulers to Trick-or-Treaters each year.
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