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Home / Sports / The FBI also investigated payments to college athletes in the 1980s. It did not end well.

The FBI also investigated payments to college athletes in the 1980s. It did not end well.

SMU fans hold balloons up in a game against Wichita State in February called "FBI". Former Wichita State players were among the names reportedly listed in the FBI's recent NCAA basketball investigation. (Tony Gutierrez / Associated Press)

When music agent Norby Walters came up with a new plan to enter the sports agent business in the 1980s, he wanted to sign college football and basketball players with secret contracts to pay them thousands while using them Amateurs in exchange for their pledge worked to keep Walters while they were on business – he decided to consult some attorneys first.

This plan would obviously violate the rules of the NCAA, the lawyers said, but it would not break any laws. So Walters went to work and signed dozens of prospective colleges across the country. Then, because of Walter's mob-linking and rumors of threats of violence, the FBI got involved. Six years later, Walters was a sports agent, but a lengthy, expensive criminal investigation and prosecution collapsed at the appeals courts, where a judge made dry observations about the role of the NCAA in creating the black market that Walters had exploited.

Three decades later – when the men's basketball final shook up the basics of college sports this weekend with another FBI investigation – it's worth taking another look at what happened to Walters, whose story is the timelessness of college football Accounts at the heart of the tide show Federal Probe, and also serves as a warning story for the prosecutors and FBI officials in New York who are conducting the current investigation.

The son of a Polish immigrant who opened a nightclub in Brooklyn, Walters took over for his father and expanded in the 1950s and 1960s. Later he owned 21 bars and restaurants throughout New York. Walters later told the Washington Post that he met John "Sonny" Franzese, a sub-boss of the criminal Colombo family.

"When you're in the hospitality industry, you really meet a lot of people, I mean, you meet a lot of people," Walters said in 1987. "He was just a kind of person you know."

Three decades ago, music agent Norby Walters had devised a plan to sign college football and basketball players with secret contracts in return for their consent she represents, if they become professional, would pay money. (Joe Kohen / AP PICTURES FOR KPP)

In the 1970s and 1980s, Walters entered the music industry and became a booking agent, with clients including Janet Jackson, Kool and the Gang, and Patti LaBelle. Michael Franzese – Son of Son, known as "Yuppie Don" – became a business partner who offered financial support and, as Franzese later testified, his unique persuasive skills. In 1982, when Dionne Warwick considered dropping Walters, Franzese said he had paid a visit to the singer's representatives, and she changed her mind.

In 1984, Walters, then in his fifties, was approached by Lloyd Bloom, a mid-20s bouncer who worked for his father's collection agency while pursuing ambitions to become a sports agent. Bloom suggested that Walters expanded into sports and offered to attract customers. Franzese agreed to finance the new sports agency, he later said, allowing the men to use his name and reputation to convince potential customers to sign.

Before Walters and Bloom took to the streets, Walters met with attorneys from respected New York law firm Shea & Gould to discuss his idea of ​​paying college athletes to sign with him.

"I told him that his behavior violated the rules of the NCAA," attorney Michael Feldberg later testified. "But NCAA rules are not a law."

Walters and Bloom have been very successful over the next two years. With a prize pool of $ 2,500 to $ 5,000 a month, plus a few hundred more a month, plus gifts, including clothing and cars, the two signed nearly 60 athletes, mostly football players, with a few basketball players.

In early 1987, when the NCAA and some newspapers began to investigate the tactics of Walters and Bloom, the couple brazenly disregarded their indifference to NCAA dilettantism rules.

"Part of being a businessman is investing," Walters told the Atlanta Journal-Constitution. "If I were to invest $ 500,000 in a McDonald's franchise in downtown Atlanta, would anyone question my investment?"

Among the athletes Walters admitted that he had paid: Ohio State Wide Receiver Cris Carter, who switched to a Hall of Fame career, Temple ran back Paul Palmer, runner-up in the 1986 Heisman Trophy Voting, and Purdue Security Rod Woodson, who also went on a Hall of Fame career.

In Chicago, rumors that Walters and Bloom threatened to break the legs of players who denied their offers drew the interest of the FBI and the federal prosecutor. A grand jury began in 1987 to investigate their tactics.

When Walters was asked by a post-reporter in 1987, where he considered the grand jury's investigation possible, he replied, "Hell, I hope."

In August 1988, grand jury Walters and Bloom filed a number of charges, including extortion, postal fraud, blackmail conspiracy and wiretapping.

Walters after his indictment in 1988. (Associated Press)

To incriminate Walters and Bloom, prosecutors in Chicago used an unusual legal theory. To prosecute someone with fraud, the prosecutor's office needed victims. Paying college athletes on the surface seemed to be a crime without sacrifice.

According to prosecutors, the victims were the schools – including Michigan, Michigan State, Notre Dame and Auburn – who paid scholarships to athletes who fraudulently claimed to be amateurs in a conspiracy with Walters and Bloom.

Prior to the indictment, prosecutors made preliminary agreements with 43 former college athletes who agreed to compensate schools for their scholarships to avoid charges. Carter, then of the Philadelphia Eagles, was the only athlete charged with crimes for lying to the grand jury. Later, he received a suspended sentence and a fine of $ 15,000.

The prosecutors had stricter penalties for Walters and Bloom in mind. The process, in March and April of 1989, was a bit of a circus, with Witness Michigan football coach Bo Schembechler, singer Warwick (who influenced mobsters influencing their decisions), and Franzese, the mafioso who served a term for extortion and tax evasion. The jury condemned Walters and Blooms harassment, postal fraud and conspiracy, and the judge sentenced Walter to five years in prison and Bloom to three years in prison.

None of the men has served a day. They were allowed to remain free during appeals, and in 1990 an appeals court dismissed the convictions. The judge had been wrong in part because he gave inappropriate instructions to the jury about the weight of the lawyers who advised Walters and Bloom, it was not a crime to break the NCAA rules.

The prosecutors tried to convict Walters for mail fraud and he filed an Alford plea – a sort of guilty plea, which essentially meant that he gave the prosecutor the right, but did not punish what he had done – and immediately appealed inserted.

In June 1993, a court of appeal ruled again in favor of Walters and dismissed the only remaining conviction. Paying college athletes was not a scam, wrote Judge Frank H. Easterbrook, who described Walters as "a wicked and untrustworthy fellow," but also exposed NCAA amateurism rules and the colleges that visited these athletes for criticism.

"Many scholars see the NCAA as a cartel," wrote Easterbrook. "The NCAA lowers athletes' incomes – and restricts payments to the value of education, housing, and food while receiving services of significantly higher value." The NCAA treats this as a desirable preservation of amateur sports, a more yellow-faced eye would see as the use of monopsony power to obtain athlete performances for less than the competitive market price. "

Anton Valukas, the former US attorney who prosecuted Walters and Bloom, said in a telephone interview this week that he does not regret the case, which he considers a worthwhile use of federal law enforcement agencies because of the threats of violence and the possibility that members of the Franzes family would have relied on Walters' clients to influence the outcome of the Games for betting purposes.

"I was not particularly worried about protecting the NCAA or college teams … but much more interested and concerned that the money and muscle for Walters came from the Colombo family," said Valukas, Senior Partner Jenner & Block in Chicago. "They had mob money and the ability to blackmail or extort these athletes, and it would not take too much to encourage someone to drop two key passwords in a key game."

The current FBI probe New York has not revealed allegations of violent threats or links to organized crime. Two Adidas officials and an aspiring NBA agent are being charged with fraud for plotting to pay the players' families. The victims, according to the prosecutors, are Louisville and Miami, according to the same theory that was rejected in Walters case. Four assistant trainers and a tailor-made suitmaker are also being subjected to a series of charges – including bribery conspiracy and wiretapping conspiracy – in which the NCAA rules also play an important role.

When asked if he had prosecuted his cases, if there had been no mafia involvement or allegations of violent threats, Valukas replied, "I do not know the answer to that."

Bloom was found dead in his Malibu home in August 1993 at the age of 34. He had made many enemies, and the headline in the Los Angeles Times about his death was: "Few surprises from agent killing."

Walters retired back to Los Angeles, where he still runs with a high-profile crowd. Now 85, he hosts an annual Oscar party, called "Night of 100 Stars," at the Beverly Hilton. Walters, who was contacted by phone this week, spoke briefly to a reporter before hanging up.

"Listen, Mr. Post – by the way, I loved the movie The Post … but that's 30 years ago, and I do not want to talk about it," he said.

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