Ex-Pimco Chief Hints at College-Scam Defense: Gifts, Not Bribes
Ex-Pimco Chief Hints at College-Scam Defense: Gifts, Not Bribes
(Bloomberg) -- Douglas Hodge, the former Pimco chief accused of using a middleman to cheat his kids’ way into elite colleges, offered a glimpse of his defense on Monday: He made donations, not bribes.
“It’s not the case those were corrupt payments,” his lawyer Brien O’Connor told a federal judge at a hearing in Boston.
Hodge will show that the payments he made to a nonprofit foundation run by William “Rick” Singer -- the confessed mastermind of the biggest college admissions fraud the U.S. has ever prosecuted -- were just like large donations he’d made over the years to support higher education long before his kids applied to college, O’Connor said.
“It was entirely consistent,” he told the court.
Singer, who pleaded guilty to the cash-for-college racket, ushered the children of wealthy clients into top schools by fixing their college-entrance exam scores, creating fake sports profiles to get them admitted as recruited athletes, or both. Cooperating in the government’s investigation, he made secret recordings of conversations he had with parents long after they hired him.
“I know what I did, which is I donated to your foundation,” Hodge told Singer over the phone in November, according to an FBI transcript. “That foundation has -- its stated mission is to help underserved kids basically get into -- you know, through -- get through college. And that’s all I’m going to say.”
But earlier in the call, he told Singer, “We don’t have to talk in code. We know how this works,” according to the transcript.
The colleges where Hodge, who once led the giant bond manager, Pacific Investment Management Co., is accused of effectively bribing sports coaches are the University of Southern California and Georgetown University. Monday’s hearing was over possible conflicts of interest that O’Connor’s firm, Ropes & Gray LLP, might have in the case, since it also represents USC, though on matters unrelated to the case. U.S. Magistrate Judge M. Page Kelley is weighing the issue.
Hodge isn’t the only parent fighting the charges by arguing Singer was deceptive. O’Connor told Kelley his client’s case would turn on Hodge’s honest intent and Singer’s duplicity.
“What was his state of mind?” he said of Hodge. “What was his relationship with Mr. Singer?” As for the latter, he said, the critical question will be “When did he reveal what his scheme, his scam was all about?”
O’Connor didn’t immediately respond to a request for comment.
Hodge, one of 19 parents who have pleaded not guilty to racketeering charges, is accused of funneling $475,000 through Singer’s foundation and $75,000 through the USC Women’s Athletic Board to win college admission for three of his children, two to USC and one to Georgetown.
It was a longtime friend of Hodge, “who enjoys a fabulous reputation in the investment management world,” who suggested in 2007 that he contact Singer, a college admissions strategist in Newport Beach, California, O’Connor told the court. Hodge was working in Japan when the oldest of his seven children was applying to college, he said.
“Why don’t you meet Rick Singer? He’s the best there is,” the friend told Hodge, according to O’Connor.
Of 51 people charged, 14 parents have pleaded guilty to charges including money laundering and conspiracy, with a 15th scheduled to enter his guilty plea on Wednesday.
Along with Singer, the U.S. has charged 16 college coaches, test personnel and employees of the ringleader, seven of whom have pleaded guilty.
None of the colleges or students in the scandal have been charged.
The case is U.S. v. Sidoo, 19-cr-10080, U.S. District Court, District of Massachusetts (Boston).
To contact the reporter on this story: Janelle Lawrence in New York at jlawrence62@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey, Joe Schneider
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