A Newport Beach man pleaded guilty Tuesday to federal charges of masterminding a wide-ranging bribery scheme designed to get children of well-heeled parents into elite universities, including USC and UCLA, with actresses Felicity Huffman and Lori Loughlin among those implicated.
Huffman and several coaches at local universities were among a dozen people arrested Tuesday in Los Angeles in connection with the alleged $25 million scheme. Federal prosecutors said wealthy parents would pay thousands of dollars to get their children admitted to prestigious universities by passing them off as recruited athletes — regardless of their athletic ability — or by helping them cheat on college entrance exams.
A federal indictment unsealed in federal court in Boston named 50 defendants from across the country.
Federal authorities identified William Rick Singer, 58, of Newport Beach, as the leader of the scheme. He pleaded guilty Tuesday in Boston federal court to charges including racketeering conspiracy and obstruction of justice.
Huffman, who starred in the ABC show “Desperate Housewives,” made her initial federal court appearance Tuesday afternoon in Los Angeles and was expected to be released on a $250,000 bond — signed in court by her husband, actor William H. Macy. The Academy Award nominee has been ordered to appear in federal court in Boston on March 29.
Loughlin, best known for her role in the sitcom “Full House,” and her husband, designer Mossimo Giannulli, were also among those charged with paying bribes to help their children gain admission into top universities. Giannulli was arrested Tuesday morning, but Loughlin was not home at the time. Giannulli also appeared in court Tuesday and was freed on $1 million bail.
The alleged conspiracy led to arrests Tuesday by federal agents in multiple states. Athletic coaches from USC, UCLA, Yale, Stanford, Wake Forest and Georgetown, among others, were implicated, as well as parents and exam administrators.
There was no indication that the schools themselves were involved in the scheme.
Those charged include longtime UCLA soccer coach Jorge Salcedo and USC water polo coach Jovan Vavic, who were both charged with conspiracy to commit racketeering; Donna Heinel, USC’s senior associate athletic director; and Ali Khosroshahin, former USC women’s soccer coach, and his former assistant coach, Laura Janke.
USC announced Tuesday afternoon that Vavic and Heinel had been “terminated,” and said the university is cooperating with the probe, dubbed operation Varsity Blues.
“USC has not been accused of any wrongdoing and will continue to cooperate fully with the government’s investigation,” according to the university. “We understand that the government believes that illegal activity was carried out by individuals who went to great lengths to conceal their actions from the university.”
USC further stated it is “conducting an internal investigation … and the university will take additional employment actions as appropriate.”
The university is also “in the process of identifying any funds received by the university in connection with this alleged scheme. Additionally, the university is reviewing its admissions processes broadly to ensure that such actions do not occur going forward.”
USC President Wanda M. Austin issued a separate statement saying the university is a victim of the conspiracy. She called it “immensely disappointing” that employees would allegedly abuse their positions.
“The federal government has alleged that USC is a victim in a scheme perpetrated against the university by a longtime 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,” Austin wrote. “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. The government has repeatedly informed us that it views USC as a victim and that these employees purposefully deceived USC.”
Austin said the school has planned “significant remedial efforts” and will “take all appropriate employment actions.”
“We will review admissions decisions,” she stated. “We are identifying all funds received that may be connected to the government’s allegations. And we will be implementing significant process and training enhancements to prevent anything like this from ever happening again.”
UCLA and UCLA Athletics issued a joint statement saying Salcedo, who was among those taken into custody Tuesday, has been placed on leave.
“The U.S. Department of Justice announced this morning a criminal case naming UCLA men’s soccer head coach Jorge Salcedo as a defendant, and notified UCLA that it is a potential victim of a fraudulent scheme,” according the statement. “Coach Salcedo has been placed on leave and will have no involvement with the soccer team while this matter is under review. Assistant coaches Matt Taylor and Phil Marfuggi will lead the team in his absence.
“The conduct alleged in the filings revealed today is deeply disturbing and in contrast with the expectations we have of our coaches to lead their teams with honesty and integrity,” according to UCLA. “If the facts alleged are true, they represent a grave departure from the ethical standards we set for ourselves and the people who work here. UCLA is not aware of any current student-athletes who are under suspicion. The university is cooperating with the Department of Justice and will conduct its own review to determine the proper steps to take to address this matter.”
According to federal prosecutors, Singer operated the Edge College & Career Network — also known as The Key — a for-profit college counseling and preparation business. He also served as the CEO of the Key Worldwide Foundation — a nonprofit corporation he established as a purported charity, authorities said.
Between 2011 and last month, Singer allegedly conspired with dozens of parents, athletic coaches, a university athletics administrator and others to use bribery and other forms of fraud to secure the admission of students to colleges and universities. Also charged for their alleged involvement in the scheme were 33 parents and 13 coaches and associates of Singer’s businesses, including two SAT and ACT test administrators, prosecutors said.
Among those facing racketeering conspiracy charges is Igor Dvorskiy, 52, of Sherman Oaks, director of West Hollywood College Preparatory School, a private elementary and high school, and a test administrator for the College Board and ACT, according to the U.S. Attorney’s Office.
Jane Buckingham, identified by the U.S. Attorney’s Office in Boston as the CEO of a Beverly Hills boutique marketing company, is facing mail and wire fraud charges.
Buckingham was the host of a January event at her Beverly Hills home where New York Sen. Kirsten Gillibrand spoke, and was also among the co-hosts for a fundraiser in Beverly Hills on Saturday for Gillibrand’s exploratory committee for a possible campaign for the Democratic presidential nomination.
Officials said the plot involved cheating on entrance exams, as well as bribing college officials to say certain students were being recruited to compete on athletic teams when those students were not in fact athletes.
Some of the defendants are accused of bribing college entrance exam administrators to cheat on the tests through a variety of means — by having a smarter student take the test or by providing students with answers to exams or correcting their answers after they had completed the exams, according to the criminal complaint.
Others allegedly bribed university athletic coaches and administrators to designate applicants as “purported athletic recruits” — even though they did not play the sport they were recruited to play.
Parents allegedly paid up to $6.5 million in bribes.
Huffman is accused of paying $15,000 disguised as a charitable donation to the Key Worldwide Foundation to aid her oldest daughter’s university prospects. A confidential informant allegedly told investigators that he told Huffman he could arrange for a third party to correct her daughter’s answers on the SAT after she took it. She ended up scoring 1420 — 400 points higher than she had gotten on a PSAT taken a year earlier, The Washington Post reported.
Huffman also contemplated running a similar scam to help her younger daughter, but ultimately did not pursue it, the complaint alleges.
The U.S. Attorney’s Office alleges that Loughlin’s daughters were recruited by USC’s crew team, despite the fact they had no experience in crew.
Federal prosecutors said that in some cases, the ruse over fake athletic recruiting included the use of staged or faked photos of the students posing with athletic equipment or appearing to compete in sports they did not actually play.
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