On March 12, 2019, the U.S. Department of Justice announced that 50 individuals have been charged with various crimes related to an alleged fraud scheme—known as “Operation Varsity Blues”—to cheat on entrance exams and bribe college officials to admit students whose parents are wealthy actresses, CEOs, and business executives.
In all, 33 parents collectively paid $25 million to William Singer, who ran an admissions consulting business to help students get accepted into the university of their choice. Once Singer was paid—averaging from a few thousand dollars to $6 million—he would launder that money through his nonprofit charity called Key worldwide Foundation (KWF) and then use it to bribe test administrators and college coaches.
Singer arranged for a third-party—later identified as Mark Riddell—to secretly take the SAT and ACT exams on behalf of the students or replace their test results with his own. The test administrators would accept bribes and allow Riddell to take the tests or change their answers after the students took the tests. Parents of these students allegedly paid between $15,000 and $75,000 per test.
On the other hand, Division I college coaches have the authority to recommend certain recruited athletes to the admissions office to be accepted. Singer would bribe these coaches and other athletic officials in exchange for recommending certain students to admission officials—even though these students didn’t play sports. Athletic credentials were falsified, using online stock photos and sometimes photoshopping the student’s face onto the picture of the athlete.
Singer has been charged with and pleaded guilty to conspiracy to defraud the United States, obstruction of justice, money laundering conspiracy, and racketing conspiracy. Notable parents include actress Lori Loughlin, best known for her role in “Full House” as Aunt Becky, and Felicity Huffman, a star on “Desperate Housewives” and married to actor William H. Macy.
Loughlin and her husband, fashion designer Mossimo Giannulli, have been charged with conspiracy to commit fraud and honest services mail fraud. The couple allegedly agreed to pay $500,000-worth of bribes in exchange to have their two daughters get recruited to the University of Southern California (USC) crew team.
Huffman was charged with the same offenses as Loughlin. She and Macy made a contribution of $15,000 to Singer’s organization, so their daughter could participate in the entrance exam scheme. Additionally, Huffman later attempted to pursue the scheme a second time for their younger daughter, before ultimately backing down.
On March 14, a class-actin lawsuit filed by two Stanford University students, who claim both went through the admissions process to Stanford without being informed to the rigged and unfair practices in which rich parents could bribe the college to accept their children. The lawsuit also names UCLA, USC, the University of Texas, University of San Diego, Yale University, Georgetown University, and Wake Forest University.
As the investigation continues, authorities suggest the list of parents may increase in the coming months.
If you have been arrested for a white collar crime in Massachusetts, contact our Boston fraud defense attorney at Brad Bailey Law today.