Ed Martin, 68, a retired Ford Motor Co. electrician, made the payments as gifts and loans between 1988 through 1999 to former Wolverines Webber, Robert Traylor, Maurice Taylor and Louis Bullock, the indictment says.
"All of the money that was loaned to the basketball players and their families by Eddie L. Martin was concealed and kept secret," Jeffrey Collins, U.S. attorney in Detroit, said in a statement Thursday.
None of the basketball players or their families is involved in a criminal investigation, Collins said.
Martin and his wife, Hilda, were arrested Thursday morning on charges of running an illegal gambling business, conspiracy and money laundering, resulting from an investigation by the FBI and Internal Revenue Service.
A U.S. District Court magistrate set a $10,000 personal bond each during their arraignment Thursday afternoon.
The loans enabled Martin to conceal the profits from his alleged gambling operations at Detroit-area auto plants, according to the indictment handed down Wednesday by a federal grand jury.
Marvin Krislov, university vice president and general counsel, said in a statement that the school received a copy of the indictment Thursday and continues to cooperate with federal investigators, the NCAA and the Big Ten on the investigation.
"We have built our athletic programs on a foundation of integrity and all of us, including our Athletic Department leadership, coaches and student athletes, remain firmly committed to that fundamental value," Krislov said.
Michigan has banned Martin from its programs since March 1997.
Current coach Tommy Amaker said the team remains committed to a strong basketball program. Former coach Steve Fisher, who currently leads San Diego State, left the university after allegations about Martin became public.
"As far as we are concerned, these matters are in the past, and we will continue to move forward," Amaker said. "We are committed to building the Michigan basketball program the right way."
According to the indictment, Webber received about $280,000 from 1988 to 1993, a period extending from his freshman year at Detroit Country Day high school through his sophomore season at Michigan. He later was the first pick overall in the NBA draft. Webber, the leader of the famous Fab Five era, now plays for the Sacramento Kings.
"Wow, that's a substantial amount of money," Webber's agent, Fallasha Erwin, said Thursday afternoon. "I've known Chris and his family for a long time, since Chris was 6, and I know the conditions he lived in before entering the draft.
"He didn't live the kind of lifestyle that would coincide with somebody with that kind of money. It seems a little far-fetched. I don't know where they came up with that figure, but that's what our judicial system is for."
Erwin said he did not know if Webber would issue a statement. Webber's mother, Doris Webber, declined comment Thursday.
According to the indictment, Traylor received $160,000 beginning while he was at Detroit Murray Wright High School in 1994 and continuing into the fall of 1998 at Michigan. Traylor now plays with the NBA's Charlotte Hornets.
Taylor received $105,000, but didn't get any money from Martin until 1996, his sophomore year at Michigan, according to the indictment. The former Detroit Henry Ford High School star now plays for the Houston Rockets.
Bullock, a Temple Hills, Md., native, played four years at Michigan from 1995-99 and received $71,000 throughout his career, according to the indictment. Bullock is not in the NBA.
Messages left Thursday with the agents of Traylor and Taylor were not immediately returned.
The NCAA does not comment on specific allegations against schools, NCAA spokeswoman Jane Jankowski said.
"We'll take a look at whatever information is available in this situation," Jankowski said. "And our enforcement staff will make the decision on what appropriate steps are necessary."
The NCAA has a four-year statute of limitations on imposing penalties, but two of the three exceptions to that policy may apply in this situation that dates back to Webber's enrollment in the fall of 1991.
The NCAA can impose sanctions for violations more than four years ago if: there is a pattern of willful violations on the part of the institution or individual involved or if there is a blatant disregard for the NCAA's fundamental recruiting and extra-benefit regulations.
If one of these exceptions applies, the enforcement staff has one year from the time the information becomes available to the NCAA to investigate and submit to the institution an official inquiry regarding the matter.
Since Martin's name first surfaced in the fall of 1996, Michigan has fired two basketball coaches — Steve Fisher and Brian Ellerbe — changed athletic directors twice and conducted three investigations.
The school revamped its complimentary ticket policies and restricted access in the tunnel area of Crisler Arena to limit access of boosters.
Martin has refused to cooperate, and the players named in the indictment either told university investigators they did not take loans from Martin, or they refused to talk.
FBI agents raided the homes of Martin, his son, Carlton, and some of their associates in the spring of 1999, seizing gambling and financial records, gambling paraphernalia and cash. The investigation has covered Martin's activities from 1988-1999.
Carlton Martin was sentenced to 18 months in federal prison after pleading guilty in September 2000 to federal gambling charges. He could have received a shorter sentence, even probation, but he did not cooperate to the satisfaction of federal authorities seeking information on the gambling ring and his father's links to former Michigan basketball players, prosecutors said at the time.
Each of the players named in the indictment unsealed Thursday has testified about his activities with Martin before a federal grand jury. Fisher, now San Diego State's head coach, also testified, along with two of his former assistants, Brian Dutcher and Perry Watson, who is Detroit Mercy's coach.
Martin has long been well-known among Detroit-area high school basketball observers. During the '80s, he followed highly ranked teams coached by Watson at Southwestern High School. University investigators labeled him a "basketball junkie" who would befriend top players.