NCAA says settlement won’t stop probe

As Reggie Bush strolled across USC’s campus this week, the 2005 Heisman Trophy winner casually dismissed an NCAA investigation into whether he received improper benefits from marketing agents while playing for the Trojans.

“Dead subject,” he said. “That’s what it is.”

But Pacific 10 Conference and NCAA officials said Friday that they are continuing to pursue their nearly 1-year-old investigation despite a settlement that could keep some of the parties from cooperating.

“This has not gone away by any means,” said Ron Barker, the Pac-10’s associate commissioner of governance and enforcement.

The probe has moved forward recently, Barker said, because “new people” have spoken with investigators. He declined to identify the people interviewed.

Bob DeMartino, a New Jersey memorabilia dealer who last year told Yahoo Sports that Bush and his family had received cash and benefits from marketing agent Mike Ornstein, said Friday that he recently spoke with NCAA investigators.

“I don’t think it’s going to die out, based on my conversation with the NCAA,” DeMartino said.

DeMartino said he had signed a document saying he would not disclose elements of his interview.

The settlement between Bush’s family and would-be marketing agent Michael Michaels could affect the investigation, “if they have an agreement they’re not going to talk,” Barker said. The investigation has been hindered because Bush, Michaels and others allegedly involved have declined to cooperate.

Michaels had alleged that Bush’s mother, stepfather and younger brother did not pay rent to live in a San Diego-area home he owned while Bush played for the Trojans. Bush and his family also allegedly received cash disbursements.

The undisclosed settlement was first reported by the San Diego Union-Tribune. Yahoo Sports reported that sources said the settlement was for between $200,000 and $300,000.

Rachel Newman Baker, the NCAA’s director of agent, gambling and amateurism issues, said in a statement that the NCAA was aware of the settlement.

“Hopefully, the settlement agreement will encourage individuals who previously refused to cooperate due to concerns about potential litigation to now come forward with information that may assist with our ongoing investigation,” the statement said.

If investigators find that Bush received improper benefits while playing for the Trojans, USC could be forced to forfeit games. Bush’s status as a Heisman winner also could be in jeopardy.

USC also could face sanctions if it were proved that school officials knew or should have known about the alleged benefits.

Michaels and Lloyd Lake founded New Era Sports & Entertainment, a marketing agency that they allege was born with cooperation from Bush and his stepfather, LaMar Griffin.

Attorneys for Michaels and Lake had threatened to file lawsuits to recover what they claimed they were owed after Bush signed a marketing agreement with Ornstein and hired agent Joel Segal.

Jordan Cohen, Michaels’ attorney, had not specified an amount that would be sought in a lawsuit. He told the Union-Tribune that they would not proceed with the lawsuit but offered no further comment. Cohen did not return phone calls from The Times on Friday. David Cornwell, Bush’s attorney, also did not return phone calls.

Negotiations between Michaels and Bush did not include Lake. Brian Watkins, the attorney representing Lake, has said a suit on Lake’s behalf would ask for $3.2 million. At this point, the lawyer said, Lake still intends to file a lawsuit against Bush, but that plan could change.

“We’re reasonable people,” Watkins said. “So it’s not like we wouldn’t talk.”

Any future legal action could be crucial to the NCAA’s probe. Lacking power of subpoena, NCAA officials have been waiting for a lawsuit that would provide information, gathered under oath and placed into court files, that might be helpful to their investigation.

USC Coach Pete Carroll declined to comment about the settlement on Friday. This week, he said he was not worried about the investigation.

“I know the truth about all that, and I’m not concerned at all,” he said.

gary.klein@latimes.com

david.wharton@latimes.com