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Ex-EYBL coach testifies Nike employees directed payments to basketball recruits' parents, handlers

NEW YORK -- A former Nike EYBL coach testified on Friday that two of the sneaker company's employees directed him to make payments of tens of thousands of dollars to the parents and handlers of at least three high-profile recruits and then submit fraudulent invoices to the company for reimbursement.

Gary Franklin, who founded California Supreme and coached its under-17 elite team on the EYBL circuit, testified during celebrity attorney Michael Avenatti's federal criminal trial that he facilitated payments to Phoenix Suns center Deandre Ayton's mother as well as to the handlers, coaches and trainers of Denver Nuggets center Bol Bol and former UNLV player Brandon McCoy when they were still amateurs.

Franklin testified that in June 2016 he helped facilitate payments of $30,000 to Melvin McDonald, a California-based trainer who worked with Ayton and Bol; $15,000 to Shaun Manning, who was McCoy's handler; and $15,000 to Ayton's mother, Andrea.

Franklin also testified that he flew from Los Angeles to Phoenix to deliver $10,000 more in cash to Andrea Ayton.

Franklin told the jury that Nike EYBL director Carlton DeBose then instructed him to submit an expense report to Nike for $60,000 and specify that the money was going to be used to pay for a California Supreme back-to-school event and travel expenses for his program's 15- and 16-year-old team.

Avenatti, whom the federal government accused of attempting to extort as much as $25 million from Nike to conduct an internal investigation of its employees' alleged misconduct, had released a text message between Franklin and DeBose, which Avenatti said detailed the false invoice for $60,000.

"Send me an invoice for $60K. $30K line item for 16U, 15U travel expenses, $30K for CA Supreme Back to School Event Sponsorship," DeBose wrote, according to Avenatti.

During Franklin's testimony on Friday, he said that the California Supreme invoice was fraudulent.

"Was there a Cal Supreme back-to-school event?" defense attorney Scott Srebnick asked Franklin.

"No, there was not," Franklin answered.

"Those expenses were not for the 15- and 16-under travel expenses, correct?" Srebnick asked him.

"The travel expenses and back-to-school event never happened," Franklin said.

Franklin testified that he submitted another false invoice for $15,000 to Nike for a Cal Supreme middle school event in June 2017 to pay McDonald's nonprofit organization.

"Was there a middle school challenge?" Srebnick asked.

"No," Franklin answered.

"So that was another false invoice you were directed to create by Carlton DeBose?" Srebnick asked.

"Yes," Franklin answered.

In 2017, according to Franklin, he was "squeezed out" from coaching Cal Supreme's under-17 team after he declined to allow Bol and other players to join his team. One of the players was California-based attorney Bryan Freedman's son, Franklin said. Franklin testified that he had previously declined an offer of $100,000 from Freedman, paid over three years, to allow his son to join Cal Supreme.

Franklin said DeBose and Nike EYBL manager Jamal James all but ordered him to allow Bol and Freedman's son on his team. Franklin said James and another Nike employee, John Stovall, met with him shortly thereafter.

Stovall previously contributed to ESPN's recruiting coverage.

"I felt threatened," Franklin said. "[James] said, 'Hey, you don't have to do this. We can ask you as a courtesy, but we can just move you out.'"

Nike replaced Franklin as coach of Cal Supreme's under-17 team and declined to renew his program's sponsorship agreement, which provided $72,000 in cash and other apparel, basketballs and merchandise each year.

At that point, Franklin testified, he started recording his telephone conversations with DeBose, James, Stovall and other Nike employees.

Franklin's friend and adviser, Jeffrey Auerbach, reached out to Avenatti in March 2019, after he failed to reach a resolution with Nike, which referred him to its outside attorneys.

While Franklin repeatedly said he "wanted justice" and DeBose and James to be fired, he testified that he was blindsided by Avenatti when the attorney tweeted about his allegations, and then announced a news conference on March 25 to discuss their alleged wrongdoing.

Federal agents arrested Avenatti in New York the same day. Shortly before Avenatti's arrest, according to Franklin, FBI agents knocked on the front door of his home in Los Angeles. Franklin called Avenatti, who told him, "Turn your phone completely off and don't talk to them. I hope Nike isn't trying to [expletive] you."

"I never wanted to go public or have any press conference at all," Franklin said on Thursday, while being questioned by federal prosecutors.

Franklin also acknowledged on Thursday that he didn't know what Ayton's mother, McDonald and Manning used the money for.

A Nike attorney testified earlier in the week that the apparel and sneaker company had received a subpoena from the U.S. Attorney's Office for the Southern District of New York and two subpoenas from the U.S. Securities and Exchange Commission related to alleged corruption in its grassroots basketball division.

Federal judge Paul G. Gardephe indicated earlier this week that the U.S. Department of Justice grand jury subpoena requested information and documents about several individuals and entities, including the University of Arizona and 2018 five-star recruit Nassir Little, who now plays for the Portland Trail Blazers.