A massive federal investigation dubbed “Operation Varsity Blues” has snared at least 50 people, including actresses Felicity Huffman and Lori Loughlin, in a widespread college admissions cheating and bribery scandal, prosecutors announced Tuesday. Huffman, Loughlin and Loughlin’s husband are among the dozens of wealthy parents accused of paying bribes to help get their children into top universities, including USC, Yale, Stanford, Wake Forest and Georgetown.
“We’re talking about deception and fraud — fake test scores, fake credentials, fake photographs, bribed college officials,” U.S. Attorney for the District of Massachusetts Andrew Lelling said.
Others arrested in the federal sting include Division 1 athletic coaches, CEOs and college exam administrators. The investigation is centered around William “Rick” Singer, a 58-year-old Newport Beach man who ran Edge College & Career Network LLC and the nonprofit Key Worldwide Foundation. The case against Singer and the 49 other individuals was unsealed March 12 in federal court in Boston.
“Between approximately 2011 and February 2019, 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 including Yale University, Georgetown University, Stanford University, the University of Southern California, and Wake Forest University, among others,” the U.S. Attorney’s Office for the District of Massachusetts said in a press release. “Also charged for their involvement in the scheme are 33 parents and 13 coaches and associates of Singer’s businesses, including two SAT and ACT test administrators.”
Stanford University sailing coach John Vandemoer and former Yale women’s soccer coach Rudy Meredith were also charged, along with Mark Riddell, a counselor at IMG Academy, a private school in Bradenton, Florida.
“The conspiracy involved 1) bribing SAT and ACT exam administrators to allow a test taker, typically Riddell, to secretly take college entrance exams in place of students or to correct the students’ answers after they had taken the exam; 2) bribing university athletic coaches and administrators—including coaches at Yale, Stanford, Georgetown, the University of Southern California, and the University of Texas—to facilitate the admission of students to elite universities under the guise of being recruited as athletes; and (3) using the façade of Singer’s charitable organization to conceal the nature and source of the bribes,” the U.S. Attorney’s office said.
Loughlin, best known as Aunt Becky on”Full House” and Huffman, known for “Desperate Housewives,” and the other parents were charged with conspiracy to commit mail and wire fraud. Singer faces the most serious charges, including racketeering, money laundering conspiracy, conspiracy to defraud the U.S. and obstruction of justice. He is expected to plead guilty to those charges Tuesday in federal court.
Loughlin is accused with her husband, fashion designer Mossimo Giannulli, of paying $500,000 in bribes to get their daughters, Olivia Jade Giannulli and Isabella Rose Giannulli, into USC, by having them recruited as crew athletes through bribery. Huffman is accused of paying $15,000 to have a test administrator secretly correct her daughter’s SATs. She made the payment to help her daughter, Sophia Grace Macy, get into college, and later inquired about using a similar scheme for her younger daughter, Georgia Macy, but decided against it. Her husband, actor William H. Macy, is named in court documents, but was not charged.
Here’s what you need to know about Operation Varsity Blues:
1. Singer Told Parents ‘What We Do Is We Help the Wealthiest Families in the U.S. Get Their Kids Into School’
The scheme led by Rick Singer has been ongoing since at least 2011, according to a press release from federal prosecutors.
Singer worked with SAT and ACT test administrators, college athletics coaches and administrators to help get the children of wealthy parents into elite schools. According to prosecutors, Singer paid bribes to have unqualified students recruited as athletes and also paid test administrators to take the SATs and ACTs for the students.
“According to the charging documents, Singer facilitated cheating on the SAT and ACT exams for his clients by instructing them to seek extended time for their children on college entrance exams, which included having the children purport to have learning disabilities in order to obtain the required medical documentation. Once the extended time was granted, Singer allegedly instructed the clients to change the location of the exams to one of two test centers: a public high school in Houston, Texas, or a private college preparatory school in West Hollywood, California,” the press release said.
Singer had relationships at those facilities with Niki Williams and Igor Dvorskiy, who took bribes of up to $10,000 per test to allow the cheating scheme to work. Williams and Dvorskiy would typically allow someone else to take the tests for the students, prosecutors said. That person was often Mark Riddell, the former director of college entrance exam preparation at IMG Academy in Florida. Riddell is a former college and pro tennis player.
“Specifically, Williams and Dvorskiy allowed a third individual, typically Riddell, to take the exams in place of the students, to give the students the correct answers during the exams, or to correct the students’ answers after they completed the exams,” prosecutors said. “Singer typically paid Ridell $10,000 for each student’s test. Singer’s clients paid him between $15,000 and $75,000 per test, with the payments structured as purported donations to the KWF charity. In many instances, the students taking the exams were unaware that their parents had arranged for the cheating.”
According to prosecutors, “It is further alleged that throughout the conspiracy, parents paid Singer approximately $25 million to bribe coaches and university administrators to designate their children as purported athletic recruits, thereby facilitating the children’s’ admission to those universities. Singer allegedly described the scheme to his customers as a ‘side door,’ in which the parents paid Singer under the guise of charitable donations to KWF. In turn, Singer funneled those payments to programs controlled by the athletic coaches, who then designated the children as recruited athletes – regardless of their athletic experience and abilities. Singer also made bribe payments to most of the coaches personally.”
In a recorded phone call with parents, Singer said, “Okay, so, who we are…what we do is we help the wealthiest families in the U.S. get their kids into school…My families want a guarantee. So, if you said to me ‘here’s our grades, here’s our scores, here’s our ability, and we want to go to X school’ and you give me one or two schools, and then I’ll go after those schools and try to get a guarantee done,” according to prosecutors.
“As part of the scheme, Singer directed employees of The Key and the KWF to create falsified athletic “profiles” for students, which were then submitted to the universities in support of the students’ applications,” prosecutors said. “The profiles included fake honors that the students purportedly received and elite teams that they purportedly played on. In some instances, parents supplied Singer with staged photos of their children engaged in athletic activity – such as using a rowing machine or purportedly playing water polo.”
Singer also is accused of disguising the bribes as charitable contributions to his foundation, which allowed the parents who paid the bribes to deduct them from their federal income tax returns. Prosecutors said:
Specifically, Singer allegedly instructed clients to make payments to the KWF in return for facilitating their children’s admission to a chosen university. Singer used a portion of that money to bribe university athletic coaches to designate the children as student athletes. Thereafter, Masera or another KWF employee mailed letters from the KWF to the clients expressing thanks for their purported charitable contributions. The letter stated: ‘Your generosity will allow us to move forward with our plans to provide educational and self-enrichment programs to disadvantaged youth,’ and falsely indicated that ‘no good or services were exchanged” for the donations. Many clients then filed personal tax returns that falsely reported the payment to the KWF as charitable donations.
2. The Parents Arrested Include Several CEOs & Senior Executives, Along With Loughlin & Huffman
While Lori Loughlin and Felicity Huffman are the most well known of the 33 parents arrested as part of Operation Varsity Blues, all of those who are facing charges are wealthy and successful. The list of arrestees includes CEOs, founders of companies and executives. All were charged with conspiracy to commit mail and wire fraud. None of their children were charged and authorities say in some cases, they did not know that their parents took part in a scheme to help get them into college.
Laughlin’s husband, fashion designer Mossimo Giannulli, 55, was also charged in the case. Huffman’s husband, actor William H. Macy, was named in court documents, but is not facing charges.
Here are the others who were arrested:
– David Sidoo, 59, of Vancouver, Canada, who runs a private investment banking and financial management firm. Sidoo is accused of paying $200,000 to get his son into college.
– Gregory Abbott, 68-year-old the founder and chairman of International Dispensing Corporation, a New York-based food and beverage packaging company, and his wife, Marcia Abbott, 59.
– Gamal Abdelaziz, a 62-year-old former senior executive of a resort and casino operator in Macau, China.
– Diane Blake, 55, a San Francisco-based retail merchandising firm executive and her husband, Todd Blake, 53, an entrepreneur and investor.
– Jane Buckingham, 50, of Beverly Hills, the CEO of a boutique marketing company.
– Gordon Caplan, 52, of Greenwich, Connecticut, the co-chairman of an international law firm based in New York City.
– I-Hin “Joey” Chen, 64, who provides warehousing and related services for the shipping industry.
– Amy Colburn, 59, and Gregory Colburn, 61, of Palo Alto, California
– Robert Flaxman, 62, the founder and CEO of a real estate development firm
– Elizabeth Henriquez, 56, and her husband, Manuel Henriquez, 55, of Atherton, California, the founder, chairman and CEO of a specialty finance company.
– Douglas Hodge, 61, of Laguna Beach, California, the former CEO of an investment management company
– Agustin Huneeus Jr., 53, of San Francisco, the owner of wine vineyards
– Bruce Isackson, 61, of Hillsborough, California, the president of a real estate development firm, and his wife, Davina Isackson, 55.
– Michelle Janavs, 48, of Newport Coast, California, a former executive at a large food manufacturer.
– Elisabeth Kimmel, 54, of Las Vegas, the owner and president of a media company.
– Marjorie Klapper, 50, of Menlo Park, California, the co-owner of a jewelry business.
– Toby MacFarlane, 56, of Del Mar, California, a former senior executive at a title insurance company.
– William McGlashan Jr.,55, of Mill Valley, California, a former senior executive at a global equity firm.
– Marci Palatella, 63, of Healdsburg, California, the CEO of a liquor distribution company.
– Peter Jan Sartorio, 53, of Menlo Park, California, a packaged food entrepreneur.
– Stephen Semprevivo, 53, of Los Angeles, an executive at a privately held provider of outsourced sales team.
– Devin Sloane, 53, of los Angeles, the founder and CEO of a provider of drinking and wastewater systems.
– John Wilson, 59, of Hyannis Port, Massachusetts, the founder and CEO of a private equity and real estate development firm.
– Homayoun Zadeh, 57, of Calabasas, California, an associate professor of dentistry.
– Robert Zangrillo, 52, of Miami, the founder and CEO of a private investment firm.
3. Former Coaches at Georgetown, Wake Forest, USC & UCLA & College Test Administrators Are Also Facing Charges
Multiple athletic coaches at prominent colleges were also arrested as part of the investigation, along with test administrators for the SATs and ACTs, according to federal prosecutors.
The coaches arrested are: former Georgetown men’s and women’s tennis coach Gordon Ernst; former Wake Forest women’s volleyball coach William Ferguson; former USC women’s assistant soccer coach Laura Janke; former USC head women’s soccer coach Ali Khoroshahin; former UCLA men’s soccer head coach Jorge Salcedo; former USC water polo coach Jovan Vavic; former Stanford sailing coach John Vandemoer; and former Yale head women’s soccer coach Rudolph “Rudy” Meredith.
Donna Heinel, the senior associate athletic director at USC, was also charged.
They were all charged with racketeering conspiracy, except for Meredith, who was charged with conspiracy to commit wire fraud and honest services wire fraud as well as honest services wire fraud. Vandemoer is expected to plead guilty, prosecutors said.
Federal prosecutors also charged several College Board and ACT test administrators, including some who worked at private schools.
Rounding out those charged with racketeering conspiracy are: Igor Dvorskiy, the director of a private elementary and high school in Los Angeles and a test administrator for the College Board and ACT in Sherman Oaks, California; Martin Fox, the president of a private tennis academy in Houston; Steven Masera, accountant and financial officer for the Edge College & Career Network and the Key Worldwide Foundation; Mikaela Sanford, an employee of the Edge College & Career Network and the Key Worldwide Foundation; and Niki Williams, assistant teacher at a Houston high school and test administrator for the College Board and ACT.
4. Prosecutors Said ‘for Every Student Admitted Through Fraud, an Honest & Genuinely Talented Student Was Rejected’
At a press conference announcing the charges, federal authorities said students with legitimate credentials who were denied a spot in the universities because of the fraud are among the victims in the case.
“This case is about the widening corruption of elite college admissions through the steady application of wealth, combined with fraud,” said U.S. Attorney for Massachusetts Andrew Lelling said at the press conference. “There can be no separate college admission for wealthy, and I will add there will not be a separate criminal justice system either.”
Lelling added, “For every student admitted through fraud, an honest and genuinely talented student was rejected.” He said, “We’re not talking about donating a building so a school is more likely to take your son or daughter, we’re talking about deception or fraud.”
The investigation was led by the FBI.
“We believe everyone charged here today had a role in fostering a culture of corruption and greed that created an uneven playing field for students trying to get into these schools the right way through hard work, good grades and community service,” John Bonavolonta, FBI special agent in charge, said at the press conference.
Bonovolonta said the investigation began in May 2018 when agents uncovered evidence of “large scale fraud,” while working a separate undercover investigation. More than 200 federal agents across six states were involved in Operation Varsity Blues, he said.
“Following 10 months of investigation using sophisticated techniques, the FBI uncovered what we believe to be a rigged system,” Bonavolonta told reporters. He said the system was, “robbing students all over the country of their right to a fair shot of getting into some of the most elite universities in this country.”
The College Board said in a statement, “Today’s arrests resulting from an investigation conducted by the U.S. Attorney’s Office in Massachusetts send a clear message that those who facilitate cheating on the SAT – regardless of their income or status – will be held accountable. The College Board has a comprehensive, robust approach to combat cheating, and we work closely with law enforcement as part of those efforts. We will always take all necessary steps to ensure a level playing field for the overwhelming majority of test takers who are honest and play by the rules.”
5. Federal Prosecutors Released Hundreds of Pages of Documents Connected to the Case, Including Transcripts of Recorded Phone Calls Featuring Loughlin, Huffman & the Other Defendants
Federal prosecutors have released hundreds of pages of documents as part of the case. The documents include transcripts of phone calls recorded by cooperating witnesses with those charged, including Lori Loughlin and Felicity Huffman. You can read the documents below:
The 50 individuals charged in the case face several years in prison, though first offenders without a criminal record rarely face near the maximum potential sentence. Here are the potential sentences, according to prosecutors:
The charge of racketeering conspiracy provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater and restitution.
The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, up to three years of supervised release, and a fine of not more than $500,000 or twice the value of the property involved in the money laundering.
The charge of conspiracy to defraud the United States provides for a sentence of no greater than five years in prison, up to three years of supervised release and a fine of $250,000.
The charge of obstruction of justice provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.
The charges of conspiracy to commit mail fraud and honest services mail fraud, and of conspiracy to commit wire fraud and honest services wire fraud, provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of 250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
“United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie Wright, and Kristen A. Kearney of Lelling’s Securities and Financial Fraud Unit are prosecuting the case,” according to a press release.
You can read additional documents below: