Actress Lori Loughlin, center, exits federal court in Boston, Massachusetts, U.S. (Photographer: Scott Eisen/Bloomberg)

Parents in College Scandal Make a Legal ‘Declaration of War’

(Bloomberg) -- Lawyers for the parents indicted in the college admissions scandal are building an arsenal of defenses, taking aim at a conspiracy charge at the heart of the case as well as a money-laundering allegation the U.S. added last week.

As some parents, including former TPG executive Bill McGlashan, ex-Pimco chief Douglas Hodge and TV sitcom veteran Lori Loughlin, begin to marshal their arguments, others have already punched back. Most have the money to mount an aggressive, multi-front defense.

“When you take on well-heeled clients, you’re inevitably inviting a battle,” said Peter Henning, a former federal prosecutor who teaches at Wayne State University Law School in Detroit. “This is not going to be easy for the government.”

The first salvo was fired on April 9, as parents learned they’d been indicted.

The 19 indicted parents are accused of scheming with admitted ringleader William Rick Singer, a college admissions strategist, in a brazen plot to cheat their kids’ way into some of the most selective schools in the country. Lawyers for the parents, who are from states including California, Florida and Massachusetts, wrote to the court complaining that prosecutors had engaged in judge shopping and adding that their clients shouldn’t be tried together with others they’d never met.

Ilene Jaroslaw, who once prosecuted federal crimes in New York, called the defense lawyers’ letter “a declaration of war.”

Back to 1946

Then, on Monday, lawyers for Gregory and Amy Colburn of Palo Alto, California, went further, seeking a dismissal of the two charges against them, which all the indicted parents face: a mail and wire fraud conspiracy and a money-laundering conspiracy.

The couple wielded several arguments -- notably that the government’s case is deficient.

They invoked a 1946 Supreme Court case, Kotteakos v. U.S., in which a broker was accused of conspiring with 32 loan applicants to defraud the government. The high court reversed the resulting convictions, noting the defendants had only the broker in common, not one another, and that there were at least eight separate conspiracies, not just one as alleged.

“This is where conspiracy law gets nebulous,” Henning said, adding that any convicted parents would do well to cite Kotteakos on appeal. “It’s not clear any of the other parents knew anyone else was doing it.”

The Colburns also said the government has failed to allege enough facts to prove a fraud conspiracy, because test scores aren’t a form of “property” covered by the statute and because there’s no claim that the proctor, an independent contractor allegedly bribed by Singer, owed a fiduciary duty to the exam companies.

And, they added, if the court agrees there is no “actionable fraud,” the money-laundering conspiracy count should be dismissed as well.

The Colburns “did not participate in the sprawling conspiracy alleged by the government, or any other conspiracy,” their lawyer, Patric Hooper, of Hooper Lundy & Bookman PC, said in a statement. “They are putting their trust in the judicial system to clear their names.”

The U.S. says 33 parents paid millions of dollars in bribes and fees through Singer. He provided for a test-taking surrogate, Mark Riddell, to ace the SAT or ACT for their children, or facilitated bribes to university coaches to get the kids in as sports recruits, funneling the money through a charity he ran -- or both, prosecutors said.

Singer and Riddell have pleaded guilty and cooperated with the government as part of plea deals. Singer later secretly recorded calls with parents, some of which appear to show them discussing the alleged score-boosting or bribery scheme.

“I expect a lot more guilty pleas,” said Diane Ferrone, a criminal defense lawyer in New York who isn’t involved in the case.

Zangrillo’s Daughter

In addition to the indicted parents, almost all of whom have entered not-guilty pleas, 13 others -- among them Gordon Caplan, the former co-chairman of law firm Willkie, Farr & Gallagher, and the actor Felicity Huffman -- have said they will plead guilty, likely hoping for leniency at sentencing.

One parent who is fighting the charges is Robert Zangrillo, who is accused of paying $250,000 to get his daughter admitted as an athletic recruit at the University of Southern California. His lawyer, Martin Weinberg, has said the allegations about bribing coaches don’t amount to a money-laundering conspiracy case.

The parents’ payments “are not unlawful proceeds of criminal activity,” added Randall Eliason, a former federal prosecutor who teaches at George Washington University’s law school. “The money doesn’t become ‘proceeds’ of a criminal activity, which is required for money laundering, until it is in the hands of the bribe recipients.”

Even if parents fail to win a dismissal on legal grounds, they will push for individual trials so they’re not all lumped together before jurors as part of a far-reaching conspiracy, legal experts said. If there are multiple trials, it may be difficult for Singer to keep his story straight under the pressure of repeated attacks.

‘Come to Jesus’

“Can somebody in Texas who might be accused of having someone sit for a test for their daughter be properly joined at trial with an individual in California who’s accused of paying more than $500,000 in bribes?” said Brad Bailey, a former federal prosecutor in Boston, sketching out an argument parents will make to sever trials from one another.

At trial, defense lawyers will zero in on potential weaknesses in the government’s case. Bailey, who isn’t involved in the case, expects them to attack Singer’s credibility by arguing, “He told us this was all proper. We really thought we were making a legitimate charitable contribution. College admissions is messy, and people do give buildings to schools to get their kids in.”

Defense lawyers will “come hard after Mr. Singer,” saying “he has a reason to take down as many people as he can by lying,” Bailey added.

In the end, though, some of the indicted parents may have a reckoning.

“It’s a defendant-specific thing,” said Ferrone. “You have people who said initially, ‘I didn’t do anything illegal,’ but as they start reading emails and see the evidence and context,” they may contemplate a conviction and “have what we defense lawyers call the ‘come to Jesus’ moment and decide, ‘I don’t really want to risk going to trial or begging for mercy from the court.’”

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