UPDATE: University issues statement in response to allegations against associate head coach Chuck Person. The University called the allegations 'shocking' and said it has placed Person on unpaid suspension. Read more here.
Prosecutors investigating a bribery and fraud scheme involving four top NCAA basketball assistant and associate head coaches, including Auburn's Chuck Person, said Tuesday that the NCAA was not made aware of the covert investigation until Tuesday.
"The schools are, in a way, the victims," said Joon Kim, the acting U.S. Attorney for the Southern District of New York. "The schools are also a victim where they have hired college coaches who are taking bribes, cash bribes, from managers and advisers to direct players who are in their care to managers and advisers."
Person has been suspended without pay.
Kim said federal bribery and wire fraud statutes prohibit those who work for public institutions or institutions that receive federal funding from taking bribes.
"All of us, the public, anyone who plays in the games are victims of that type of conduct," Kim said.
The investigation was undercover and covert until Tuesday morning. Kim, who is the supervising prosecutor over the U.S. Attorney's Office overseeing the wide-ranging and ongoing investigation, said the NCAA was not made aware of the investigation until Tuesday morning.
"We have reached out to the NCAA, and we will be working and talking to them," Kim said.
Administrators and higher ranking officials in the programs were not believed to be involved in the scheme, Kim said Tuesday.
"There is a lot there," Kim said. "Ten people have been arrested, four coaches at major, top-tier basketball programs. That is a significant number of people and conduct that affects a number of important programs. The investigation ... is ongoing.
More than ten people, including coaches, managers, financial advisers and representatives of a major sportswear company, are facing similar charges, including coaches at Southern California,
Person and others involved were arrested overnight and this morning with the help of law enforcement across the country, Kim said.
The bribes were in exchange for the coaches to influence student-athletes to retain services of bribe-payers once the athletes entered the NBA, according to the charging documents.
The charging documents allege that Person and bespoke suit maker Rashan Michel, founder of the Atlanta-based company Thompson Bespoke Clothing, conspired as part of the scheme.
Person "abused his coaching position at (Auburn) to solicit and obtain bribe payments" from a financial adviser in exchange for Person agreeing to direct student-athletes to retain the services of the financial adviser and Michel when they went into the NBA, the documents read.
Over a 10-month period, the financial adviser paid more than $91,000 in bribes to Person as part of his agreement to use his coaching influence over high-profile student-athletes at Auburn who had the potential to get recruited by the NBA.
About $18,500 of the money he received was sent to the two student-athletes he steered to the financial adviser.
Person, according to the documents, told one player, "don't share this with your sisters, don't share this with any of the teammates, that's very important cause this is a violation ... but this is how the NBA players get it done."
While pushing professionals, the bribed coaches paid little regard to the players on whom they were pushing the advisers and agents who were supplying the bribes, Kim said.
"They ignored red flags, seeing only the green of the cash bribes flowing their way," Kim said.
Kim said Person told players that the financial adviser, who was a cooperating witness with the U.S. Attorneys, knew and worked with Auburn sports star Charles Barkley.
He had never met Barkley.
The investigation is still ongoing and interviews are still being conducted, prosecutors said.
"We will see how pervasive it is," Kim said.