Admissions Cheating Scandal: Updates and Thoughts

Felicity Huffman pleaded guilty in federal court in Boston Monday to one count of conspiracy to commit wire fraud/honest services fraud. Her sentencing guidelines according to the plea agreement (available here) are either 4 to 10 months (government’s calculation) or 0 to 6 months (Huffman’s calculations.) Prosecutors say they will recommend 4 months in prison either way.

A jail or prison sentence is unlikely in my view. [More…]

First, the guidelines are computed on the basis of amount of loss (money paid by the parents to Chief Scammer Rick Singer and his charity, and she’s at the bottom, having only paid about $15,000.. So she should be the lowest benchmark, with probation and community service and maybe some home detention, so that those with more responsibility aren’t walloped. There are other parents who also pleaded guilty right away who, while they paid more, also don’t deserve a jail sentence. Especially since all federal sentences must be “sufficient but not greater than necessary” to fulfill the purposes of sentencing. For example, another parent who pleaded guilty yesterday, Devin Sloane, paid between $150k and $300k. The government is recommending 12 months and a day for him (the extra day allows him to get good time and reduces the sentence to 10 months).

Second, Huffman agreed to pay for a fixed test score, but not a fake psych exam to get her daughter extra time to take the test. She said, and the proseuctor didn’t disagree, that her daughter had been seeing a neuropsychologist since she was 8 and had always gotten extended time for testing. The two components to the scheme were (1) getting extra time through a psych eval so that Singer could change the location of the test to a site where he hired the proctors and test cheater/faker, Mark Riddell and (2) bribing coaches to create fake profiles of the parents’ kids showing them playing a sport they really didn’t play, and then getting them in as athletes. Huffman paid so that Riddell could review her daughter’s test score and change answers, giving her a higher score, but not the rest of it.

On the flip side, Huffman didn’t pay less because there was some kind of sliding scale of payment. The reason her fee was so low was because her daughter took the test with four other of Singer’s clients, meaning the test taker/cheater and proctor only had to do one test time and date. The total fee was $75,000, but it was shared among the five test-takers.

Also, Huffman hardly needs a handout. According to the court docket in her case, prosecutors at her bail hearing said she has real estate assets in excess of $20 million and $4 million in investments. The prosecutor wanted her bail to be set in the amount of 1% of her assets. The court set bail at $250,000, but granted her a signature bond, guaranteed by husband William Macy. (In other words, the Huffmans didn’t have to put up any assets or money.)

Check out the March Architectural Digest with a big spread on their new Aspen digs. (They published it as soon as the news of the scandal broke. I love the kitchen). It’s on the land she and her sisters grew up on, but when her mother passed, it was run-down and not up to code. So she and Macy had it torn down and hired a very prominent architect to build a new house. The interior designer for the project is also quite famous.

According to current Aspen real estate assessment records, the 35 acre plot of land (right on Woody Creek) is worth $10 million and the house is worth another $10 million.

Sidetracking for a minute to the overall scandal, this case has played out so far for the Government like a fine-tuned violin. First, the Government had a financial fraudster from L.A. named Morrie Tobin against the ropes in an international securities fraud case. Tobin has at least four daughters, one of whom graduated from Yale, two who are presently at Yale, and one who was recently accepted. He decided to play ball for the Government and ratted out the Yale women’s soccer coach in hope of receiving a lesser sentence in his securities case.

With Tobin’s information, they busted the Yale women’s soccer coach, Rudy Meredith, who had already left and gone on to be a coach in Rhode Island. Meredith ‘fessed up and handed them Rick Singer on a silver platter. Singer is the creepy-looking owner of the college admissions consulting company who created the schemes and used his charitable foundation and the others charged to carry it out.

Singer then ratted out Mark Riddley, a wannabe pro-tennis player who settled for being a director of college entrance exam prep at the famous tennis IMG Academy in Bradenton, FL, and who then sold his biggest asset, his native intelligence, to Singer by cheating on tests and faking scores of college admission tests for the unacademically inclined (or academically challenged) children of super-rich parents. What is the IMG Academy? From the LA Times:

The academy, which boasts celebrity alumni including Andre Agassi, Serena Williams, Jim Courier and Anna Kournikova, has a sprawling 500-acre campus with more than 50 tennis courts, an 18-hole golf course, two basketball gyms and a 5,000-seat stadium. High school tuition ranges from $61,650 to $77,650 a year.

Singer also turned on the parents. In addition to turning over his business records he made phone calls to the parents while the feds were listening, feeding them a story that his charity, to which they had all made donations, was being investigated for tax fraud, but the IRS didn’t know about the fake test scores. He then tried to get the parents to make inculpatory statements, admitting they knew Riddell had faked their kids scores and agreeing not to tell the IRS if they got interviewed.

Singer also tried to get them to agree to tell the IRS they thought their donations were to help underprivileged kids. These phone calls, coupled with Singer’s records and all the electronic surveillance, and subpoenaed bank records and emails and in some cases GPS data, was sufficient to bring charges against the parents, coaches and Singer employees.

The prosecutors and FBI agents are calling all the shots in this case. They made their own assessment as to hierarchy of the parents (level of culpability) and told the parents’ lawyers “take our offer now or we’ll indict and bring more charges.”

I can’t recall another multi-defendant, complex case with wiretaps and other forms of electronic surveillance where so many defendants folded within days or a few weeks of the discovery being provided. Where was the back and forth bargaining? The search for a defense? Even the parent who was the manager of a large and prominent Manhattan law firm folded on the first pass. He is pleading to a felony with the feds asking for jail time and will lose his law license.

As for no back and forth, every one of these plea agreements contains a sentence at the very end that the defense lawyer has to endorse that I’ve never seen before in any agreement: “I also certify that the U.S. Attorney has not extended any other offers regarding a change of plea in this case.” So the lawyers are signing under oath that the agreements entered into are the ones the Government first offered.

Personally, I think the parents are at the bottom of this food chain, with the crooked coaches just below Singer at the top for their betrayal of trust to the institutions they worked for and the students. Just below them I’d put Riddell, the cheating test- taker. The test proctors would be close to the bottom but higher than the parents. That the cheating test-taker and proctors made the least money doesn’t make them less culpable in my view. Their willingness to sell fake test scores was motivated only by greed. They messed with the most uniform standard the nation has for college admission (the SAT/ACT). I think their willingness to fake and sell test results that students spend months and months of angst preparing for is far beyond a parent’s attempt to get one or two of their kids into school.

I also disapprove of the shaming rituals the Government put these parents through — starting with the 6 a.m. arrests by FBI agents at gunpoint as they were sleeping, many with children in the home.

The timing was no accident. This was a coordination of teams of FBI agents around the country, from California, Nevada, and Colorado to Connecticut, New York, Florida and more. It’s routine in large drug or gang cases – simultaneous arrests minimize the chance of one subject getting word of the bust to co-conspirators, who might then flee or destroy evidence. But in this case, not a single parent was a flight risk.

Had the parents been informed of the charges, all would have gotten lawyers, not plane tickets. Since all but one parent was initially charged by Information rather than Grand Jury Indictment, there was no grand jury secrecy rule to stop prosecutors from giving the parents or their lawyers a heads up as to the charges so they could surrender instead of being arrested.

Relatedly, has anyone remarked on how unwealthy and disheveled the parents looked at the courthouse on the day of their first appearance? Some of the men were wearing flip flops. One wore a ski parka with a lot of dirty spots over a suit jacket. Felicity Huffman had zero makeup on, etc. This was by design. The intent was clear: wake the parents up, scare the daylights out of them, and humiliate them in a way that wouldn’t be possible once they lawyered up, by shouting at them to get up, throwing some old clothes at them, and informing them they are going downtown and no they can’t have a few minutes to dress on their own.

Really, what evidence was left to destroy? The prosecutors already had the parents’ wiretapped conversations, text messages, phone detail records, emails, bank account records, GPS phone tracker data, as well as car trackers and more.

My theory (and it’s just a theory as I have no inside information) is that the only thing they didn’t have was the parents’ cell phones, which would be with them at their homes at 6 am, but not if they went downtown to surrender voluntarily at pretrial services or the Marshal’s office with their lawyers. They would have left their phones with their driver or in their car, or with their lawyers.

Why would the government want their cell phones? To get a search warrant (if they didn’t already have one) to download the contents of their phone for photos and contacts that might lead them to others involved in the scheme. The Government repeatedly stresses this investigation is not over.

I wonder if any of the parents were caught so off-guard being woken up by FBI agents with guns telling them to get up, get dressed, they are going downtown, that when the agents asked them for permission to search their phones, they didn’t just consent. Or if the agents obtained their consent for their phones by telling them if they didn’t consent, they’d remain at the house until they got a warrant for the phones, and by then the media would be crawling all over them. (Again, this is speculation as it’s possible the agents arrived with sealed search warrants as well as the arrest warrants).

What can the parents and coaches do now to stay out of prison or lessen their sentence if convicted? Fight the charges. Maybe they can use the Donald Trump, Jr. defense that they didn’t know they’d be breaking the law.(2)Cooperate. Tell the agents and prosecutors about any friends and relatives who also paid Singer and got their kids in and ‘fess up at to who it was in their circle of friends or business associates who led them to Singer in the first place. The feds already have this info from Singer, but having a second person corroborate the details helps. No one likes to bring a case based on the uncororroborated testimony of a cooperator, even though in federal court that’s sufficient to convict. The feds have disclosed in plea agreements that some of the parents and at least one of the indicted coaches are cooperating to get lesser sentences.

The feds certainly took out their blunt force tool to use on the parents: Offer them a deal on the charges in the Complaint, and tell them if they don’t accept right now, before they’ve even had a chance to review all the evidence against them with their lawyers, they’ll face an Indictment with additional charges of money laundering. At least half the parents went this route. Here is the second superseding Indictment with the additional charges against the parents who refused to take the government’s offers.

Several of the charged parents who did not take a deal are among the wealthiest of the parents — worth hundreds of millions of dollars and they and their families are major league philanthropists, not only in their communities but globally. By contrast, what have the crooked coaches, the cheating test taker/faker and proctors contributed to society? It seems to me they were solely motivated by greed.

What’s perplexing to me is that the really wealthy parents could so easily have donated a few million to the universities they wanted their kids to go to, and they likely would have been admitted with no laws broken. Isn’t that what Jared’s father did?

What I find troubling is the cooperation deals given to the coaches, who again, in my personal view, are at the top of moral culpability pyramid, just under Singer and Riddell. USC soccer coach Laura Jahnke took a cooperation deal this week. She’s the one responsible for recommending Lori Laughlin’s daughters get admitted as accomplished rowers when they were never on a rowing team. Although she took in between $250k and $500k, she’s cooperating in exchange for a sentence below 27 months. Here’s her plea and cooperation agreement.

Georgetown tennis coach Gordon Ernst took in 2.7 million in bribes, and in exchange, obtained admissions for 12 students, over a period of six years. How is that not more serious than a parent who just let Riddell correct their child’s answers or take the test in lieu of their kid? Both are wrong and morally objectionable, but in terms of criminal conduct, I think the coach is far more culpable than the parents.

In any event, I think Felicity Huffman’s early statement of remorse and acknowledgment of guilt will serve her quite well in the end. I wouldn’t believe any headlines screaming she’s off to the big house.

As for Lori Loughlin, she’s between a rock and a hard place as the amount of money she and her husband paid Singer, coupled with their alleged participation in the coach bribery part of the scheme for both of their daughters, make probation a tougher, but not impossible sell. At least she and her husband, by rejecting the government’s offer, will have time to review all the evidence and be able to participate meaningfully in their own defense.

Just because Loughlin rejected the first offer doesn’t mean the Government can’t make a second (and maybe even better offer) later on. Contrary to what prosecutors want everyone to believe, it’s not always the first to cooperate in a multi-defendant case who gets the best deal. Sometimes it’s the last one – the one who has been holding out for trial. A deal can be struck at any time, even in the middle of trial, or after a mistrial. That said, it doesn’t give me great confidence to know this is the same U.S. Attorney’s office (with a different person at the helm) who indicted Aaron Swartz.

This is hardly the first scandal involving the SAT tests. A few years ago in Long Island, a bunch of kids were charged. Here’s the story of one named Sam , who was smart (like Riddell) and made a business of taking the tests in place of at least 15 other students. He pleaded guily and was sentenced to community service. who has gone on to not only go to college, but get a Masters Degree. He’s now selling real estate.

There’s a lot more to talk about in this case, particularly with respect to the parents who are not pleading and the deals the coaches get.

You can read the charges and plea agreements of everyone involved in the current case for free here , courtesy of DOJ.