Marietta man accused of paying college athletes

Obstruction of justice, one count: Refusing or failing to retain or permit inspection of records involving costs of recruiting or soliciting student athletes.

Agents from the Georgia Bureau of Investigation visited a modest home a few blocks off the square in Marietta a year ago with an unusual assignment.

They had a search warrant from the North Carolina secretary of state, and they were looking for evidence that Terry Watson, a sports agent who ran his business from that home, had paid football players at the University of North Carolina.

They left carrying eight boxes of documents, a laptop computer and the makings of a criminal prosecution that could have a major impact on college sports.

Indictments in Orange County, N.C., charge Watson with 13 counts of violating the state’s athlete agent law and one count of obstruction of justice. The indictments accuse him of directing an enterprise that provided cash and other benefits to three Tar Heel players.

It’s illegal for agents to provide college athletes in North Carolina with anything of value to induce them to become clients. During a six-month period in 2010, Watson arranged for the players _ Marvin Austin, Greg Little and Robert Quinn _ to receive nearly $24,000 in cash and travel costs, according to the indictments, unsealed in October.

But beyond the criminal charges is a case that is providing an extensive and, at times, striking look at how a little-known agent sought to get a toehold in a business widely known to be awash in under-the-table dealings.

The seized records indicate that Watson, using a network of surrogates, showered cash and favors on players at numerous schools, including at least one in the Southeastern Conference.

And as the case has progressed, it has thrust Watson into the middle of a national debate over how vigorously states should pursue agents as lawbreakers.

“A lot of people are following that case to see what’s going to happen,” said Dale Higer, a retired attorney from Idaho who is leading a committee seeking ways to strengthen the Uniform Athlete Agents Act, the template for laws in 41 states. “If there are convictions, I think that will be something people will applaud and maybe cause other district attorneys to take action.”

The NCAA and the colleges that form its membership have long lobbied for laws regulating sports agents. That’s because, while athletes who accept cash or other items of value can lose their eligibility and their schools can be penalized, agents are outside the NCAA’s reach.

The Uniform Law Commission took on the issue 13 years ago and came up with the Uniformed Athletes Agents Act, which prescribes criminal or administrative penalties for agents who fail to comply.

Yet even though most states have adopted the act or some version of it, the laws have been rarely enforced.

The Watson case is believed to be the first of its kind in North Carolina under its 10-year-old law, officials said.

Georgia has had some type of law regulating sports agents since 1988 and now has a version of the Uniform Athlete Agents Act. But the state has never taken disciplinary action against an agent, according to Cody Whitlock, a spokesman for Secretary of State Brian Kemp, Whitlock cited a “lack of evidence during the investigations process” as the reason the law has never been enforced.

Higer said he and other Uniform Law Commission members are considering several ways to make such cases more palatable to authorities. One would increase fines and allow prosecutors to retain a cut for their offices. Another would take local district attorneys out of the mix so it’s less likely they would be dissuaded from taking on politically touchy cases involving popular college sports programs.

“It’s my belief, and I think others agree with me, that the reason the act has not been enforced is there’s no incentive to enforce it,” Higer said.

Watson, 40, declined an interview request through his attorney, Russell Babb of Raleigh.

Four others, including a woman who was an academic tutor for UNC football players, have been indicted along with Watson for allegedly helping him recruit the three Tar Heel players and provide them with benefits.

In a recent interview, Orange County District Attorney Jim Woodall said he hadn’t read North Carolina’s sports agent statute until representatives from the secretary of state’s office came to him with information regarding Watson.

"I was aware (the law) existed," said Woodall, a UNC graduate and a prosecutor for 24 years. "I'd never looked at it."

Woodall acknowledged that the possibility of Watson being sentenced to prison if convicted is “almost none” because all but one of the charges against him are Class I felonies, the lowest level in North Carolina. And he said he would have thought “a lot longer and harder” about taking the case if he hadn’t been able to add three attorneys, including two from the secretary of state’s office.

But Woodall said he’s firmly committed to prosecuting Watson and the defendants accused of aiding him.

“Some may say this is not something we should have law enforcement spending its time and resources on,” he said. “But the state legislature said this (law) was important enough for them to pass it. So if it’s on the books, and we have clear substantial evidence (of a crime), we prosecute.”

Liz Proctor, a spokeswoman for North Carolina Secretary of State Elaine Marshall, said no officials from that office will comment while the case is pending.

‘3K in your account today’

According to search warrant affidavits, investigators have evidence showing Watson routinely funneled cash to players at UNC and other schools through Federal Express, Priority Mail, wire transfers and even direct deposit into the athletes' checking accounts.

The evidence includes text messages, recovered from Watson’s laptop, in which the agent frequently discussed the payments.

Some of the texts were explicit ("3k in your account today") while others were more cryptic. And in many instances, according to the affidavits, the payments were accompanied by messages advising the players to keep the transactions under wraps.

On one occasion, according to an exchange of messages, Watson sent money to an athlete’s girlfriend, but the plan backfired because the athlete had broken up with the woman and couldn’t retrieve the cash.

Although the affidavits hint broadly at Watson’s dealings with athletes at other schools, the only one identified in any detail is Chris Culliver, a defensive back who played at the University of South Carolina.

In one text, Watson indicated he’d sent $550 and would soon be sending more. In another, he requested Culliver’s bank account number and followed it with: “Delete these type of messages in your phone as well – ha.”

Another set of text messages between Watson and an unidentified party apparently related to a college athlete from Alabama. “Now we just need the Ala. SOS to get involved,” one text said, apparently referring to the Alabama secretary of state, which had previously scrutinized Watson.

“Man, that’s scary,” the following text read.

Babb, a former offensive lineman at UNC who co-captained the 1995 Tar Heel team, said he has requested the secretary of state’s evidence but has yet to receive it.

“We are in uncharted waters,” he said. “We need to thoroughly review the tens of thousands of documents that are the basis of these charges so we can better understand the state’s case.”

Woodall said he has noticed that Watson was paying athletes “from about four or five different states,” but he declined to be specific.

Woodall said officials in other states have already reached out to him as well as Marshall and that both are willing to share. “If the authorities in Alabama or anywhere else are interested, all they have to do is call us,” he said.

In addition to North Carolina, Watson registered as an agent in Georgia, Alabama, Florida, South Carolina and Tennessee, records show.

Alabama complaint

Watson formed his company, Watson Sports Agency, in 2005 while he was still in law school at Samford University in Birmingham, Ala.

That’s also when he hooked up with Cortland Finnegan, a Samford player who would become his most lucrative client.

Finnegan, a cornerback, wasn’t drafted until the seventh round by the Tennessee Titans in 2006, but in 2012 he merited a free agent contract from the St. Louis Rams worth $50 million over five years.

A few days after receiving that contract, Finnegan tweeted: “Best agent and agency in the world … humble beginnings. Blessed.”

Before law school, Watson worked in real estate in the Atlanta area, records show. On a form he filled out to be licensed as an athlete agent in Alabama, he cited dealing with home buyers as being “closely similar” to working as a sports agent.

The Alabama records show that Watson ran into trouble in 2009 when Troy University reported to the state’s athlete agent commission that he had “inappropriate dealings” with a football player. Troy claimed that Watson met with the player without the school’s knowledge and bought him a meal. It barred the agent from its campus and “adamantly” requested the commission not renew his license.

However, the commission took no action because Watson allowed his license to lapse. Two years later, he reapplied and was approved.

The Georgia secretary of state’s office declined to make Watson’s application and related documentation available to The Atlanta Journal-Constitution, saying those records are not subject to public disclosure.

Cartersville man implicated

The North Carolina investigation began in 2010 after an NCAA inquiry of the UNC football program turned up evidence of agents providing players with improper inducements.

Watson wasn’t linked to that investigation, which led to UNC being placed on three years’ probation, and he wasn’t the focus for the secretary of state until one of the players involved in the probe _ Austin _ described a $2,000 payment he said he’d received.

Austin said the payment was arranged by Watson but conveyed by Federal Express from another sender.

Investigators obtained the air bill and found that the name on it was Cartersville real estate agent Pat Jones, a long-time friend of Watson’s.

They then found that the phone number listed for Jones’ real estate office appeared more than 3,600 times on Watson’s phone records in 2009 and 2010, with 11 of those calls on the date the package was sent.

According to the affidavits, Jones subsequently admitted to an investigator that he’d sent cash payments to student-athletes at Watson’s request.

“Jones admitted he knew it was wrong for Watson to pay student-athletes cash to entice them to sign agency contracts, but advised the cash payments were the only way Watson could compete with the bigger athlete agents and their companies,” the investigator wrote.

Jones has since been charged with a single count of violating the North Carolina athlete agent law. He declined to be interviewed extensively for this story except to say he was flustered by the investigator, who came to his home unannounced.

“This will cost me a lot of money and time and a friendship,” he said. “It’s not good.”