Former Duke basketball player Lance Thomas settles jewelry lawsuit

Lance Thomas settled his lawsuit with Manhattan-based Raefello & Co. In addition to the jewelry debt, he also owed rent money his senior year. Credit: CHUCK LIDDY

4:05 p.m. Update

Former Duke basketball player Lance Thomas has reached a settlement with the jeweler suing him for defaulting on his payment.

“We have reached a settlement,” Mike Bowers, the attorney for Rafaello & Co. wrote in an email. “I cannot make further comment."

Thomas purchased $97,800 worth of custom jewelry on Dec. 21, 2009, while the team was on winter break in the middle of his senior year. He made a $30,000 down payment and signed a purchase agreement that said he would pay the remaining $67,800 within 15 days.

Rafaello & Co. filed a lawsuit in January after repeated attempts to collect payment. Bowers confirmed to the News & Observer last week that his client had declined to speak with the NCAA about a possible extra benefits investigation.

If the NCAA wants to pursue an investigation, the task will be much tougher without input from the jeweler.

“If everybody keeps their mouth shut and everybody refuses to talk to the NCAA, and by everybody I mean Thomas and the jeweler and whoever might have provided him this $30,000 if it did come from someone else, then there’s not much the NCAA can do if they don’t get information,” John Infante, a former assistant director of compliance at Colorado State who now writes a blog on compliance issues, said last week. “A lot of these extra benefit cases, the person that provided the benefit might not be willing to talk to the NCAA.”

The statute of limitations on the case expires Dec. 21, 2013, four years after Thomas’s purchase. Before then, the NCAA must send Duke a written notice outlining what specific bylaws the organization feels were broken.

When asked how the settlement affected the NCAA's position on the matter, spokesperson Stacey Osburn reiterated the organization's Sept. 7 statement—"We are aware of the matter and have been in communication with the university"—and declined to comment further.  

"The process remains the same in that Duke and the NCAA continue to work together on the matter," Duke associate athletic director Jon Jackson said in an emailed statement.

Neither Thomas nor Joe Crews, his attorney, responded to multiple phone calls asking for comments.

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Thomas owed money to more than just Manhattan-based Rafaello & Co. during his senior year.

Four months after Thomas failed to pay the remaining balance on five pieces of custom jewelry, the owner of his apartment filed a court complaint against him for failing to pay rent.

On April 16, 2010—10 days after Duke won the national championship—The Parc at University Tower filed a small claim action in Durham County District Court alleging Thomas had not paid $825.30 in rent. According to a copy of the complaint obtained by the News & Observer, Thomas, who is the sole defendant, failed to pay the rent due, and the owner gave him a 10-day grace period before filing the complaint.

Thomas was served by the Durham County Sheriff's office with a rent notice, which is the first step in the eviction process, on April 19, spokesman Paul Sherwin said. Thomas did not end up getting evicted. 

The complaint was dropped on April 30, 2010 when both Thomas and the representatives for the apartment complex failed to appear on the scheduled trial date. Scott Gould, a vice president of Sherman Residential, then the owner of the property, said in an email that Thomas paid in full before the company sold the complex in Sept. 2010.

Thomas listed that same address—914 Marilee Glen Court—on the purchase agreement he signed with Manhattan-based jeweler Raefello & Co. on Dec. 21, 2009.

Thomas’s purchase of nearly $100,000 worth of jewelry has drawn the attention of both Duke and the NCAA. Athletes are in violation of NCAA bylaw 16.01.3 if they receive extra benefits—such as loans based on future earnings potential—that are not available to the institution’s students, their relatives and friends determined on a basis unrelated to athletics ability. Any such benefit would be considered an “extra benefit” and put Thomas’s eligibility in jeopardy.

From the NCAA’s perspective, there are two main questions in the case: how did Thomas have $30,000 for a down payment, and how was a 21-year-old college student extended a $67,800 loan?

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If the NCAA does decide to open an investigation, it would not be subject to any type of due process, said David Ridpath, a former director of compliance at Marshall and current Ohio University professor who has testified before Congress on compliance issues. The organization’s power to investigate and punish at will stems from a 1988 Supreme Court case. NCAA v. Tarkanian ruled that, even though its membership was comprised of state universities, the NCAA itself was not a state actor.

“It’s essentially considered a private club,” Ridpath said. “And in private clubs, they can make rules that might seem a little bit strange to the rest of us and get away with it.

Right now, the NCAA does not have to provide due process, and they don’t have to answer to too many people with regard to their investigative and enforcement infractions processes that they have.”

The financial stakes have grown considerably since the time of NCAA v. Tarkanian. In 1990, CBS paid the NCAA $54 million for the television rights to the mens basketball tournament. By 2010, the number had grown nearly 15 times that size to $771 million.

The growth of college athletics has made the job of athletic directors, such as Duke’s Kevin White, tougher. When speaking generally about the challenges facing college athletics, White listed the balance between athletics and academics first (“If that’s not right, everything suffers,” he said) and compliance second.

“It’s all-consuming, never-ending,” he said of compliance.

 “It’s something you have to be ever vigilant on and about. So many units, so many transactions, so many opportunities to find yourself in a highly unfavorable position that can discredit your institution, staff, student-athletes, so many people that are part of the enterprise.”