By Hannah Fry and Richard Winton
Los Angeles Times
LOS ANGELES — In allegations sending shock waves through academia, federal prosecutors on Tuesday accused top CEOs, two Hollywood actresses and a legendary fashion designer of taking part in an audacious scheme to get their children into elite universities through fraud, bribes and lies.
The scheme, which began in 2011, centered around the owner of a for-profit Newport Beach, Calif., college admissions company that wealthy parents paid to help their children cheat on college entrance exams and falsify athletic records of students to enable them to secure admission to elite schools, including UCLA, Stanford, Yale, Georgetown and the University of Southern California, according to court records.
Fifty people across academia and college sports, as well as a cadre of super wealthy parents, have been charged in what prosecutors say is the largest ever college admissions scam to ever be prosecuted. Some parents participated in one aspect of the scheme, while others paid for both, as part of a scam that stole slots from hardworking students with legitimate grades, authorities said.
William Rick Singer, who owns the admissions company Edge College & Career Network, was charged with money laundering, obstruction of justice, racketeering and conspiracy to defraud the United States. Singer, who cooperated with authorities in the investigation, pleaded guilty to the charges in Boston Tuesday, according to court records.
Some parents participated in one aspect of the scheme, while others paid for both, authorities said.
“These parents are a catalog of wealth and privilege,” U.S. Attorney Andrew Lelling said. He said they “knowingly conspired … to help their children cheat or buy their children admission to elite schools through fraud.”
Prosecutors allege that Singer instructed parents to donate funds to a fake charity he had established as part of the scheme. Most of the parents paid at least $200,000, but some spent up to $6.5 million to guarantee their children admission to top universities, authorities said. The parents were then able to deduct the donation off their income taxes, according to the Internal Revenue Service.
The scheme itself was fairly simple, according to prosecutors: Singer instructed parents to seek extended time for their children on ACT and SAT exams. In at least one instance, a student purported to have a learning disability to obtain medical documentation required by the College Board and ACT Inc. to grant additional time on the tests, according to court documents.
Once the students were given additional time, which generally allowed them to take the test over two days instead of one and in an individual setting, the clients were instructed to change the location of the exam to either a public high school in Houston or a private college preparatory school in West Hollywood that he controlled, according to the documents.
Prosecutors allege funds from the parents were used to bribe exam administrators to facilitate cheating on the tests, in some cases by posing as the actual students, and in others by providing students with answers during the exams or by correcting their answers after they had completed the tests.
Prosecutors allege the parents’ money was also used in some cases to bribe university athletic coaches and administrators to designate applicants as athletic recruits regardless of their athletic abilities and, in some cases, even though they didn’t play the sport. In some instances, Singer helped parents use photo-editing software to place images of their children onto the bodies of athletes to provide to coaches to further the scheme, prosecutors said.
Coaches and private admissions counselors allegedly received money for helping to get students admitted as athletes to Yale, Stanford and USC.
USC senior associate athletic director Donna Heinel and men’s and women’s water polo coach Jovan Vavic were alleged to have received bribes totaling more than $1.3 million and $250,000, respectively, to help parents take advantage of the relaxed admissions standards for athletes at USC even though their children were not legitimately being recruited as athletes.
Former USC women’s soccer coach Ali Khosroshahin, who was fired by USC in 2013, and his former assistant coach, Laura Janke, who left the school in 2014, were also named in the indictment for allegedly fabricating athlete profiles for the prospective students. Khosroshahin and Janke allegedly received payments totaling nearly $350,000 sent to their private soccer club.
Interim USC President Wanda Austin issued a statement to the university on Tuesday, acknowledging the investigation and calling USC a “victim” in the scheme. She noted that among those accused of involvement were a longtime athletics department employee, a coach and three former members of the coaching staff.
“It is immensely disappointing that individuals would abuse their position at the university in this way,” Austin said. “As our work on culture and values continues, we must take the appropriate action when we become aware of behavior that is contrary to our values.”
Some of the children had knowledge of the scheme, while others were kept completely in the dark and believed they had earned admission on their own merits, prosecutors said.
Among those charged were Hollywood actresses Felicity Huffman and Lori Loughlin. The Oscar nominee and Golden Globe winner was taken into custody at 6 a.m. local time after FBI agents knocked on the door of her Los Angeles home and informed her of the charges. She was handcuffed and taken to federal jail in downtown Los Angeles.
Loughlin has not been arrested, but she’s being sought by authorities, according to FBI spokeswoman Laura Eimiller. Law enforcement sources told the Los Angeles Times she is flying to L.A. to surrender.
Loughlin, of “Full House” fame, and Huffman, whose credits include the hit ABC show “Desperate Housewives,” are charged with conspiracy to commit mail fraud and honest services fraud. According to court records, Loughlin and her husband, Mossimo Giannulli, the famous creator of clothing brand Mossimo, “agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC crew team” even though they did not participate in crew.
Huffman is accused of disguising a $15,000 charitable payment in the bribery scheme, according to court records. Prosecutors allege Huffman met with a confidential witness who explained that he could control an SAT testing center and could arrange for someone to proctor her daughter’s test and correct it. Huffman’s daughter allegedly took the test in December 2017 and received a score of 1420. That was a 400-point improvement from her first test. In October 2018, Huffman was recorded by the FBI discussing participating in the same scheme for her younger daughter; however, she did not ultimately pursue it.
Douglas Hodge, the former CEO of Newport Beach-based Pacific Investment Management Co., was also indicted in connection with his alleged participation in the scheme. Prosecutors allege Hodge used bribery to get his children admitted to USC and Georgetown as purported athletic recruits. When Hodge’s daughter applied to Georgetown in 2008, her application indicated that she had won multiple U.S. Tennis Association tournaments. However, association records indicate that she never played a USTA match, according to court records.
Jane Buckingham, a consumer trends expert and author of “The Modern Girl’s Guide to Life” parenting book series, was charged with conspiracy to commit mail fraud and honest services mail fraud.
Federal law enforcement began the investigation, dubbed Operation Varsity Blues, into the scheme in May 2018, based on a tip from a confidential source who was being interviewed as part of a separate investigation, said FBI Special Agent Joseph Bonavolonta.
“Make no mistake: This is not a case where parents were acting in the best interests of their children. This is a case where they flaunted their wealth, sparing no expense, to cheat the system so they could set their children up for success with the best education money could buy, literally,” Bonavolonta said.
“Their actions were without a doubt insidious, selfish and shameful. And the real victims in the case are the hardworking students who did everything they could to set themselves up for success in the college admissions process, but ended up being shut out because far less qualified students and their families simply bought their way in.”
