Prosecutors: college scam takes bribery to whole new level

Rich and famous parents who are accused of buying their children entrance to some of the best universities in the U.S. were part of a multilevel, years-long scam that exploited a desire expressed worldwide: to be educated at the best American institutions.

William Rick Singer of Newport Beach, California, who has pleaded guilty to orchestrating the scam and is named as a cooperating witness, earned more than $25 million by connecting parents and their children with test administrators and college coaches who took their cut for endorsing bogus applicants, says the U.S. Department of Justice.

“They flaunted their wealth, sparing no expense, so they could cheat the system so set their children up for success with the best education money could buy. Literally,” described Joseph Bonavolonta of the FBI’s Boston field office.

Exclusive, moneyed and well-connected, parents on the list of those indicted in “Operation Varsity Blues” for conspiracy to commit mail and wire fraud include the owner of a California wine vineyard and the former owner of a California media company that sold for $325 million a year ago. Some own corporations and firms, and deal in private equity and real-estate development. There are several executives, entrepreneurs, investors and CEOs among the 50 who were charged. Parents charged in the scandal list addresses on New York City’s Fifth Avenue and at Rockefeller Center, California’s Beverly Hills, Greenwich, Connecticut, and Hyannis Port, Massachusetts, where the Kennedy political dynasty owns an oceanfront summer compound.

That echelon of American wealth traditionally seeks prestigious institutions of higher education for their children: Yale, Stanford and Georgetown, among other Ivy League, or older universities known for their excellence and well-heeled connections. Other schools caught in the scam are campuses in the University of California system, the University of Texas and Wake Forest University.

Wealthy families have been donating large sums to colleges and universities for a millennia to get their offspring into prestigious schools – and get their family name inscribed in stone on university buildings or connected to a prestigious post, called a “chair.” And testing overseas for international students has been cancelled numerous times — as recently as this month — because the test answers have been widely distributed to test takers before the exam.

But prosecutors say this scam took bribery to a new level.

“We’re not talking about donating a building so a school is more likely to take your daughter or son,” explained U.S. Attorney Andrew Lelling. “We’re talking about deception and fraud. Fake test scores, fake athletic credentials, fake photographs, bribed college officials.”

Lelling said the case is one of “the widening corruption of elite college admissions. … There can be no separate admission system for the wealthy. Every year, talented students work hard … in a system that grows more and more competitive every year.”

​”For every student admitted through fraud, an honest and genuinely talented student was rejected,” he said.

Even high-achieving high-school students labor for four years to impress highly selective colleges that have low acceptance rates: Among the schools mentioned in the indictments, only 5 percent of applicants get into Stanford, 7 percent into Yale, 16 percent into University of California-Los Angeles, 17 percent into Georgetown, 18 percent into the University of Southern California, and 29 percent into Wake Forest University, according to the National Center for Education Statistics.

In addition to high grade-point averages, students applying to schools need high scores on standardized tests like the SAT and ACT. Many families pay tutors to help students improve their test scores, which can be taken several times.

But unlike most high-school juniors and seniors who take the SAT or ACT under the watchful eye of proctors in large group locations like school cafeterias, parent and Hollywood actor Felicity Huffman paid Singer $15,000 to get her daughter time and privacy to take the test, according to prosecutors. One defendant, Mark Riddell of Palmetto, Florida, answered or corrected hers and other’s responses before submitting the results to the testing companies.

And parents – some of whom paid up to $75,000 for testing assistance — got a bonus: They made their payments through a charitable organization Singer created named Key Worldwide Foundation. Not only is Key tax-exempt as a charity, parents were able to deduct those charitable contributions from their income taxes, prosecutors said.

Athletics are a unique path into higher echelon colleges and universities, and college coaches were a link between parents and Singer. A student who excels at lacrosse, soccer or basketball can boost an institution’s revenue through ticket sales, endorsements and brand marketing. College basketball is widely seen as a televised, brightly lit pathway for athletes to professional, well-paid careers.

The indictment snagged college sports coaches who acted as middlemen, knowing the applicants real abilities but taking big payoffs to endorse them for admission. College and university coaches are often the highest paid on college campuses, sometimes receiving tens or hundreds of thousands, and sometimes millions more, than the college presidents they serve.

Parents staged photos of their children engaged in popular sports, Lelling described, including photoshopping the face of their child onto the face of an actual athlete, and then submitting it to support of the child’s application.

“We believe everyone charged here today had a role in cultivating a culture of corruption and greed,” Bonavolonta said at a press conference. “Their actions were without a doubt insidious, selfish and shameful.”

Olivia Giannulli, daughter of televison actor Lori Loughlin and a YouTube star who goes by the name Olivia Jade, has seen increased heat around comments she made after her acceptance at USC.

“I don’t know how much of school I’m gonna attend,” she shared with her nearly 2 million subscribers, after explaining her extensive work schedule. “I don’t really care about school, as you guys all know.”

Prosecutors said they did not believe the schools were directly involved or knew of the pay-for-admission scam. Yale and USC issued statements early.

“We do not believe that any member of the Yale administration or staff other than the charged coach knew about the conspiracy. The university has cooperated fully in the investigation and will continue to cooperate as the case moves forward,” wrote the university’s President Peter Salovey.

“The federal government has alleged that USC is a victim in a scheme perpetrated against the university by a long-time Athletics Department employee, one current coach and three former coaching staff, who were allegedly involved in a college admissions scheme and have been charged by the government on multiple charges,” wrote USC President Wanda M. Austin to the university community.

“At this time, we have no reason to believe that admissions employees or senior administrators were aware of the scheme or took part in any wrongdoing—and we believe the government concurs in that assessment.”