Actors, CEOs accused of bribing to scam U.S. college admissions

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“Full House” actress Lori Loughlin appeared in federal court in Los Angeles on Wednesday accused of taking part in a sprawling scheme exposed this week in which wealthy parents paid for their children to cheat their way into elite U.S. colleges like Yale and Stanford.

U.S. Magistrate Steve Kim ordered Loughlin released from federal custody on 1 million U.S. dollars bond following a brief hearing, but she must limit her travel to the continental U.S. and areas around Vancouver, Canada, for work.

Loughlin's husband Mossimo Giannulli, a fashion designer known for his “Mossimo” brand, was freed on similar terms a day earlier.

The couple was allegedly paid 500,000 U.S. dollars to have their daughters labeled as crew-team recruits at the University of Southern California, according to the Associated Press.

Members of the press wait outside the Edward R. Roybal Federal Building and US Courthouse where actress Lori Loughlin attended her initial hearing in Los Angeles, California, March 13, 2019. /VCG Photo

Huffman, best known for her role in the TV series, “Desperate Housewives,” was also appeared in a Los Angeles court. Court documents say she paid 15,000 U.S. dollars disguised as a charitable donation, so her daughter could take part in the college entrance-exam cheating scam, according to the Associated Press.

Magistrate Judge Alexander MacKinnon ordered Huffman's release on a 250,000 U.S. dollars bond before a March 29 hearing in Boston, and restrict her travel to the continental United States.

Huffman's actor husband William H. Macy has not been charged in the case, but Assistant U.S. Attorney Adam Schleifer told the court he was a “subject of the investigation.”

All the defendants who appeared in the U.S. District Court in Los Angeles were likely to be released on bond, Thom Mrozek, a spokesman for the U.S. Attorney's Office, said in an email to Reuters.

Douglas Hodge, the former chief executive of the investment firm Pimco and another among the 33 parents charged in the 25 million U.S. dollars scam, also appeared in a Boston court on Wednesday. Prosecutors say he got his children into school by faking their athletic achievements. A magistrate judge released him on 500,000 U.S. dollars secured bond and overruled a federal prosecutor's objection to Hodge keeping his passport.

CEO of Crown Realty Robert Flaxman (R) hides under a hoodie as he leaves the Edward R. Roybal Federal Building and US Courthouse after he and several others attended initial hearings following their arrests in connection with an alleged 25 million-U.S. dollar nationwide bribery scheme to get students into elite universities, in Los Angeles, March 12, 2019. /VCG Photo

Other parents charged include Manuel Henriquez, the chief executive of specialty finance lender Hercules Capital Inc; 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.

In what agents code-named “Operation Varsity Blues,” some 300 law enforcement agents swept across the country to make arrests.

Prosecutors have so far named 33 parents, 13 coaches, and associates involved in the "scam" business.

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

Loughlin, Giannulli, Huffman and Hodge have yet to enter pleas.

The largest college admissions scam

The most sweeping college admissions fraud scheme ever unearthed in the United States was masterminded at a small college-preparation company based in Newport Beach, California, prosecutors said. It relied on bribes to coaches, phony test takers and even doctored photos misrepresenting non-athletic applicants as elite competitors to gain admissions for the offspring of rich parents.

“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.”

In this file photo taken on April 11, 2012 students walk past an entrance to the University of Southern California (USC) in Los Angeles. /VCG File Photo

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.”

No students have been charged and authorities said some of them were unaware of the scams.

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 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.

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

Stanford University sailing coach John Vandemoer walks into the John Joseph Moakley United States Courthouse in Boston, March 12, 2019. /VCG Photo

John Vandemoer, a former Stanford University sailing coach who worked with Singer, pleaded guilty to racketeering conspiracy on Tuesday.

Learning disabilities

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 are accused of taking 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.

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.

William 'Rick' Singer leaves Boston Federal Court after being charged with racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States, and obstruction of justice in Boston, Massachusetts, March 12, 2019. /VCG Photo

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.

(With inputs from AP)

(Top image: This combination of pictures created on March 12, 2019 shows US actress Felicity Huffman(L) attending the Showtime Emmy Eve Nominees Celebration in Los Angeles on September 16, 2018 and actress Lori Loughlin arriving at the People's Choice Awards 2017 at Microsoft Theater in Los Angeles, California, January 18, 2017. /VCG Photo)

Source(s): Reuters