Biggest U.S. college fraud bust nets Hollywood stars

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Federal authorities arrested dozens on Tuesday for a 25 million U.S. dollar scheme to help wealthy Americans, including actresses Felicity Huffman and Lori Loughlin and some CEOs, cheat their children's way into elite universities, such as Yale and Stanford.

The largest college admissions fraud scam unearthed in U.S. history was run out of a small college preparation company in Newport Beach, California, that relied on bribes to sports coaches, phony test takers and even doctored photos depicting non-athletic applicants as elite competitors to land college slots for the offspring of rich parents, prosecutors said.

"These parents are a catalog of wealth and privilege," Andrew Lelling, the U.S. attorney in Boston, said at a news conference. "For every student admitted through fraud, an honest, genuinely talented student was rejected."

William "Rick" Singer, 58, pleaded guilty on Tuesday to charges related to running the scheme through his Edge College & Career Network, which charged from 100,000 U.S. dollars to as much as 2.5 million U.S. dollars per child for the services, which were masked as contributions to a scam charity Singer runs.

"I was essentially buying or bribing the coaches for a spot," Singer said as he pleaded guilty to charges including racketeering, money laundering and obstruction of justice. "And that occurred very frequently."

The Hoover Tower rises above Stanford University in this aerial photo in Standford, California, U.S., January 13, 2017. /Reuters Photo

John Vandemoor, a former Stanford University sailing coach who worked with Singer, also pleaded guilty to racketeering conspiracy.

Some 300 law enforcement agents swept across the country to make arrests in what agents code-named "Operation Varsity Blues." Huffman and Loughlin were due to appear in federal court in Los Angeles later on Tuesday, prosecutors said.

Prosecutors have so far named 33 parents, 13 coaches, and associates of Singer's business.

Other parents charged include Manuel Henriquez, the chief executive of specialty finance lender Hercules Capital; Gordon Caplan, the co-chairman of international law firm Willkie Farr & Gallagher; Bill McGlashan Jr., who heads a buyout investment arm of private equity firm TPG Capital; and Douglas Hodge, the former CEO of the investment management firm Pimco.

Representatives for the companies and Huffman and Loughlin either declined to comment or did not respond to requests for comment.

Actress Lori Loughlin arrives at the People's Choice Awards 2017 at Microsoft Theater in Los Angeles, California, January 18, 2017. /Reuters Photo

The alleged masterminds of scam and parents who paid into it could all face up to 20 years in prison if convicted.

Huffman, a former best actress Oscar nominee who is married to actor William H. Macy, starred in ABC's "Desperate Housewives." Loughlin, best known for her role in the ABC sitcom "Full House" and the recent Netflix sequel "Fuller House," is married to clothing company founder Mossimo Giannulli, who was also charged in the scheme.

'HELP THE WEALTHIEST'

On a call with a wealthy parent, prosecutors said, Singer summed up his business: "What we do is help the wealthiest families in the U.S. get their kids into school... my families want a guarantee."

Prosecutors said it was up to the universities what to do with students admitted through cheating.

Yale University and the University of Southern California (USC) said in separate statements that they were cooperating with investigators.

"The Department of Justice believes that Yale has been the victim of a crime perpetrated by its former women's soccer coach," Yale said in a statement.

Members of the press wait outside the Edward R. Roybal Federal Building and US Courthouse in Los Angeles, where numerous people had hearings after being arrested on March 12, 2019, in connection with an alleged 25 million U.S. dollars nationwide bribery scheme to get students into elite universities. /VCG Photo

The coach, Rudolph Meredith, resigned in November after 24 years running the women's soccer team. Meredith, who accepted a 400,000 U.S. dollar bribe from Singer, is due to plead guilty, prosecutors said. His lawyer declined to comment.

Prosecutors said the scheme began in 2011 and also helped children get into the University of Texas, Georgetown University, Wake Forest University and the University of California, Los Angeles (UCLA).

Part of the scheme involved advising parents to lie to test administrators that their child had learning disabilities that allowed them extra exam time.

The parents were then advised to choose one of two test centers that Singer's company said it had control over: one in Houston, Texas, and the other in West Hollywood, California.

Test administrators in those centers took bribes of tens of thousands of dollars to allow Singer's clients to cheat, often by arranging to have wrong answers corrected or having another person take the exam. Singer would agree with parents beforehand roughly what score they wanted the child to get.

William "Rick" Singer leaves the federal courthouse after facing charges in a nationwide college admissions cheating scheme in Boston, Massachusettes, U.S., March 12, 2019. /Reuters Photo

In many cases, the students were not aware that their parents had arranged for the cheating, prosecutors said, although in other cases they knowingly took part. None of the children were charged on Tuesday.

Singer also helped parents stage photographs of their children playing sports or even photoshopped children's faces onto images of athletes downloaded from the internet to exaggerate their athletic credentials.

Wake Forest said it had placed head volleyball coach Bill Ferguson on administrative leave after he was among the coaches accused of accepting bribes.

According to the criminal complaint, investigators heard McGlashan of TPG Capital listening to Singer tell him to send along pictures of his son playing sports that he could digitally manipulate to make a fake athletic profile.

"The way the world works these days is unbelievable," McGlashan said to Singer, according to court papers.

(Top image: Actress Felicity Huffman, star of ABC's "Desperate Housewives," speaks onstage at the 24th Screen Actors Guild Awards show in Los Angeles, California, U.S., January 21. 2018. /VCG Photo )

Source(s): Reuters