Harvard Comes Up in College Scam as Parents Face New Charges
U.S. Files More Charges Against Parents in College Scandal
(Bloomberg) -- One day after four parents who were fighting charges in the U.S. college admissions scandal changed their pleas to guilty, federal prosecutors added new charges against 11 who are still battling the government, including the TV star Lori Loughlin and the former TPG leader William McGlashan.
The main additional charge, conspiracy to commit federal-programs bribery, was announced Tuesday. The parents, who also include a Massachusetts financier named John B. Wilson and Loughlin’s husband, the designer Mossimo Giannulli, are alleged to have paid off employees of the University of Southern California to get their children admitted as sports recruits, regardless of their athletic ability.
Federal-programs bribery is theft from a program, such as a university’s, that gets federal funds. Harvard University made an unusual cameo appearance in the case, with a sting operation to nab Wilson.
The additional charges increase pressure on the parents as the sprawling case -- in which prosecutors have also charged test administrators and college athletic coaches, and cited elite schools from Stanford to Yale as victims of an epic con -- moves toward the trial phase.
“Today’s charges are the result of ongoing investigation in the nationwide college admissions case,” Andrew Lelling, the U.S. attorney for Massachusetts, said in a statement. “Our goal from the beginning has been to hold the defendants fully accountable for corrupting the college admissions process through cheating, bribery and fraud.”
Out of 35 parents charged with fraud conspiracy, 19 pleaded not guilty and were indicted on an additional charge of money-laundering conspiracy. It was from this group that four parents changed their pleas Monday.
Parents paid tens of thousands of dollars to rig their children’s entrance exam scores, prosecutors say. To lock in a seat at a selective school, some allegedly paid hundreds of thousands in bribes for athletic coaches to put their kids’ names on recruiting lists. None of the colleges or applicants in the case have been charged.
A number of parents argue their payments were donations, not the unlawful proceeds of a criminal activity that are the hallmark of money laundering. The new charge, of bribery, may be easier to prove, said Peter Henning, a former federal prosecutor who’s now a law professor at Wayne State University.
“The stakes are now higher,” Henning said. “If you make prosecutors go to trial, they’re going to seek a substantial prison term if you put them to the test.” He said the new charge facing the parents is also “a way to pump up the federal sentencing guidelines should they be convicted at trial,” and added that he could imagine sentences of four to five years.
Of 15 parents who pleaded guilty earlier this year, 10 have been sentenced, nine of them to prison terms ranging from two weeks for “Desperate Housewives” star Felicity Huffman to five months for vintner Agustin Huneeus.
The 35th parent, a Canadian woman arrested in Spain last month, hasn’t entered a plea yet.
Wilson, whom prosecutors have identified as the founder and chief executive of a private equity and real estate development firm, was previously accused of making illegal payments to get his son into USC as a purported water polo recruit. He is now charged with two counts of federal-programs bribery for paying to win his two daughters’ admission to Harvard and Stanford as recruited athletes.
Prosecutors told the scheme’s admitted mastermind, Rick Singer, who pleaded guilty and has cooperated with them, to tell Wilson he had a “senior women’s administrator” at Harvard who’d get one of his daughters in as an athletic recruit for a $500,000 bribe, according to court filings. The sting has been dubbed Operation Varsity Blues.
“Aside from reminding media that this was a ruse, and that Harvard is not implicated in Varsity Blues, we have no additional comment,” Rachael Dane, a spokeswoman for Harvard, said in an email.
Lawyers for Loughlin, Giannulli, McGlashan and Wilson didn’t immediately return calls seeking comment on the new charges.
Prosecutors announced Tuesday that, in addition to the new bribery charge, further counts of the initial fraud charge were brought against McGlashan, Wilson, Robert Zangrillo, the founder of private investment firm Dragon Global Management, and I-Hsin “Joey” Chen, who runs a provider of warehousing for the shipping industry.
Lawyers for Zangrillo and Chen didn’t immediately return calls seeking comment on the new charges.
Seven coaches and college administrators the government says were part of the scam were also hit with further conspiracy charges, on top of the racketeering conspiracy charges they’d already faced. In addition, three former college athletic officials were charged with new counts of conspiracy for allegedly soliciting bribes to usher students into the schools where they worked, including USC, Georgetown and UCLA.
On Monday, the day the four parents changed their pleas to guilty, a Houston man accused of helping Singer sneak a student into the University of Texas as a bogus tennis recruit decided to change his own plea and to cooperate with prosecutors.
To contact the reporters on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net;Janelle Lawrence in Boston at jlawrence62@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey, Steve Stroth
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