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Winnings were based on state lottery numbers. A 2003 profile in ESPN the Magazine detailed how Martin operated a numbers game in the Rouge factory: Martin, a retired electrician who worked at Ford Motor Company's River Rouge Complex, provided all the players with money. By some accounts the party was hosted by Martin, but by other accounts Martin's house was a stop on the way to a party at Detroit's Westin Hotel. Martin was reportedly returning to Ann Arbor from Detroit with Taylor, Cleaves, Bullock, Ron Oliver, Robert Traylor, and Willie Mitchell after a party that included drugs, strippers and alcohol. 'Ed' Martin, Michigan investigated his relationship with their men's basketball program. When an investigation revealed that the trip included a visit to the home of team booster Eddie L. Among the passengers was high school star Mateen Cleaves, who was on his official recruiting visit. In the early morning of February 17, 1996, a Ford Explorer driven by Michigan basketball player Maurice Taylor went out of control while returning along M-14 from a party in Detroit, 40 miles (64 km) east of Michigan's campus in Ann Arbor. Mandatory disassociations with the surviving players ended on May 8, 2013. The additional year of postseason ineligibility was overturned on appeal.

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It cost Webber his All-American 1993 honors, Traylor his MVP awards in the 1997 NIT and 1998 Big Ten tournament, as well as Bullock's standing as the school's third all-time leading scorer and all-time leader in free throws and the Big Ten's all-time leader in 3-point field goals (surpassed in 2011). The punishment cost the 2002–2003 team its postseason eligibility, cost past teams the 1997 National Invitation Tournament and the 1998 Big Ten tournament championships as well as appearances in the 19 NCAA Men's Division I Basketball Tournament Final Fours. A few months later, the NCAA accepted these punishments, doubled both the probation period and the postseason ineligibility, penalized Michigan one scholarship for four seasons, and ordered the school to disassociate from the three living guilty players until 2012 (Webber's ban extended through 2013 the fourth player, Traylor, died in 2011). In response, Michigan placed the basketball program on two years' probation, withdrew from postseason consideration for the 2002–03 season, vacated all or part of five past seasons and removed the players' names and achievements from its record book. By the fall of 2002, it was obvious that the four players were in fact guilty of taking money from Martin, and had thus compromised their amateur status. Subsequently, the NCAA investigation did not find him culpable of significant wrongdoing related to the scandal.

In 1997, Michigan coach Steve Fisher was fired for his involvement in violations relating to the scandal. He was both fined in the legal system and briefly suspended by the National Basketball Association (NBA) after performing public service. During the investigation, Webber claimed not to have had any financial relationship with Martin, but eventually confessed to taking loans from Martin.

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Four eventual professional basketball players-Taylor, Chris Webber, Robert Traylor and Louis Bullock-were discovered to have borrowed a total of $616,000 from Martin. Several Michigan players were implicated over the next few years and by 1999 some were called before a federal grand jury. The case began when the investigation of an automobile accident involving Michigan player Maurice Taylor revealed a curious relationship between Martin and Michigan's basketball program dating back to the 1980s. As a result of this investigation, Michigan's basketball program was punished with sanctions. An initial investigation by the school was joined by the NCAA, Big Ten Conference, Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and the United States Department of Justice (DOJ). It is one of the largest incidents involving payments to athletes in American collegiate history. The violations principally involved payments booster Martin made to several players to launder money from an illegal gambling operation. The University of Michigan basketball scandal, or the Ed Martin scandal, concerned National Collegiate Athletics Association (NCAA) rules violations resulting from the relationship between the University of Michigan (or Michigan), its men's basketball program, and booster Eddie L. Incident involving University of Michigan basketball teamĬrisler Arena is the home of Michigan Wolverines men's basketball.

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