Celebrity Parents and Coaches Charged in Vast College-Entrance Bribery Scheme

(Bloomberg) -- Wealthy parents, university coaches and a college-admissions counselor were among dozens charged Tuesday in a sweeping criminal conspiracy that sought to help applicants win admission to elite schools including Yale, Stanford, UCLA and Georgetown.

The parents are alleged to have paid bribes to get their kids into school, giving cash to test-takers to help students cheat on entrance exams and paying coaches to designate applicants as athletic recruits. Parents paid from $100,000 to $6.5 million in bribes, with most payments around $200,000, according to prosecutors.

“The case is about the widening corruption of elite college admissions through the steady application of wealth combined with fraud,” Andrew Lelling, the U.S. Attorney in Boston, said at a press conference. "The parents are a catalog of wealth and privilege.”

Among the four dozen charged are top names in finance, philanthropy and law, including Gordon Caplan, the co-chairman of the Willkie Farr & Gallagher law firm in New York; Manuel Henriquez, chief executive officer of Hercules Capital; and Douglas Hodge, the former CEO of Pacific Investment Management Co. Caplan and Henriquez were arrested early Tuesday. All three declined to comment.

Investigators detailed a scandal that perverted much of the admissions process for America’s elite colleges. Unlike most other SAT cheating cases, the scheme reached deep into the academy, implicating officials who allegedly subverted the missions of the universities themselves.

In all, the government said clients paid $25 million in bribes to coaches and test administrators from 2011 to 2018. In some cases, the bribes would be disguised as charitable contributions. The owner of a California-based test prep business at the center of the alleged plot said clients could also pay $15,000 to $75,000 to cheat on a standardized test -- in some cases, getting a proctor to change wrong answers in the test center.

“And it works?" one client asked the man, according to court papers.

“Every time," the man replied, with a laugh.

The man matches the description of William Rick Singer, the founder of the test prep business who pleaded guilty in the case. Singer said he told parents the alleged cheating and bribery amounted to a "side door" for wealthy clients at the most selective schools. The “front door” involved children getting in on their own merits, and the "back door" entailed making multimillion-dollar donations, which was legal though far more expensive.

“Who we are -- what we do is we help the wealthiest families in the U.S. get their kids into school,” Singer told parents, according to prosecutors. “They want guarantees, they want to get this thing done. They don’t want to be messing around with this thing. And they want in at certain schools.”

The charges come two weeks before Ivy League schools and other top universities are scheduled to announce admissions for the class of 2023. The scandal, perhaps the largest ever in admissions, is certain to raise questions about the process by which top colleges fill highly competitive freshmen classes, while highlighting the extremes to which some wealthy parents will go to win a seat.

The case was unsealed by prosecutors in Massachusetts, California, Texas, Florida and North Carolina, and defendants included celebrities Felicity Huffman and Lori Loughlin, who allegedly paid bribes to win admission for their children. Thirty-eight people were taken into custody and 33 parents were charged, prosecutors said.

"I know this is craziness, I know it is,” another defendant, Jane Buckingham, the founder of marketing firm in Los Angeles, said on an FBI recording in arranging for someone to take a test for her son, according to court papers. “I need you to get him into USC."

An email to her firm wasn’t immediately returned.

Celebrity Parents and Coaches Charged in Vast College-Entrance Bribery Scheme

The conspiracy had two key parts, prosecutors said.

The accused are alleged to have exploited a loophole in elite college admissions that allows coaches to recommend admission of students whose academic profiles are below average for the school. Prosecutors said several coaches pocketed payoffs, including the former women’s soccer coach at Yale, the senior associate athletic director at the University of Southern California, the women’s volleyball coach at Wake Forest University and the sailing coach at Stanford. Calls to them weren’t immediately returned.

In some instances, coaches were bribed to designate applicants as athletic recruits, even if they didn’t play the sport at all. Prosecutors said Singer paid $2.7 million to a Georgetown coach, who then recruited Singer’s clients to the tennis team. Rudy Meredith, the head women’s soccer coach at Yale, took a $400,000 bribe and accepted a recruit for the team, even though she had never played the sport competitively, Lelling said.

“I was essentially buying or bribing the coaches for a spot, and that occurred very frequently,” Singer, 58, said as part of his guilty plea. “The child would not know, but the family would know.”

The other part of the scheme was less sophisticated. According to prosecutors, college entrance-exam proctors took bribes to help applicants cheat on admissions tests by allowing others to pose as test-takers or giving students the answers.

Singer cooperated with authorities after he was caught in the plot and helped the government build cases against others, according to court papers; he also admitted violating the deal by alerting several parents that he was recording them for prosecutors. Also on Tuesday, Stanford’s sailing coach, John Vandemoer, pleaded guilty to accepting $1.1 million in bribes, saying Singer directed parents to funnel bribes to the school’s sailing program. Both men face prison sentences.

No students were charged, and the universities are not targets of the investigation, authorities said. Prosecutors declined to say who paid a $6.5 million bribe.

Yale, Stanford

Yale said in a statement that the school “has been the victim of a crime perpetrated by its former women’s soccer coach,” while UCLA, Georgetown and USC also suggested they were victims. Stanford said it is “deeply concerned about the allegations.” Wake Forest, Stanford and the University of Texas announced Tuesday that they had suspended or fired coaches.

“Integrity in admissions is vital to the academic and ethical standards of our university,” the University of Texas said in a statement.

At the center of the scheme is a Singer’s Newport Beach, California-based company, Edge College & Career Network LLC. He allegedly agreed with clients to have an accomplice, Florida resident Mark Riddell, take the ACT or SAT college admissions exams in their children’s place or correct their answers after they took the exams themselves. The parents allegedly paid between $15,000 and $75,000 to Singer per test, structuring their payments as donations to a California-based charity affiliated with his company, Key Worldwide Foundation, according to prosecutors.

Singer instructed parents to "seek extended time on the exams, including by having their children purport to have learning disabilities,” authorities claim.

Singer allegedly used the bogus charitable donations to bribe two other defendants, who administered the tests at a private school in Los Angeles and a public school in Houston, according to the indictment. The bribes to let Riddell take the tests were typically $5,000 to $10,000, the U.S. said.

The defendants disguised “the nature and source of the bribe payments by funneling the money through the accounts of a purported charity, from which many of the bribes were then paid,” according to court papers.

Singer also helped parents construct phony athletic profiles for their children, which sometimes included photoshopped images, to supplement fraudulently obtained exam scores and inflated grades.

The U.S. dubbed the investigation "Operation Varsity Blues," a reference to a 1999 film about a football team in Texas. The yearlong investigation included wiretaps, undercover operatives and scores of agents from the Federal Bureau of Investigation and the Internal Revenue Service from around the country. Lelling, the prosecutor, said the probe began when federal authorities were interviewing a target in a different case who tipped them to the admissions plot.

©2019 Bloomberg L.P.