LOS ANGELES — FBI says actress Lori Loughlin has been taken into custody in connection with nationwide college bribery scheme.
Fallout from a sweeping college admissions scandal swiftly spread Wednesday, with a Silicon Valley hedge fund replacing its leader and “Full House” actress expected to surrender and appear in court in Los Angeles.
Loughlin and fellow actress Felicity Huffman headline the list of some 50 people charged in documents that describe a scheme to cheat the admissions process at eight sought-after schools. The parents bribed college coaches and other insiders to get their children into selective schools, authorities said.
Loughlin is expected to turn herself in to the FBI and is scheduled for a court appearance in the afternoon. Prosecutors allege Loughlin and her husband, fashion designer Mossimo Giannulli, paid $500,000 to have their two daughters labeled as recruits to the University of Southern California crew team, even though neither is a rower.
Giannulli was released Tuesday after posting a $1 million bond.
The scandal also ensnared movers and shakers in the corporate world. The Palo Alto, California, hedge fund Hercules Capital announced Wednesday it was replacing its leader, Manuel Henriquez, who was arrested in New York City on Tuesday and released on $500,000 bail. Shares of the hedge fund plunged 9 percent.
Henriquez will still hold a seat on the board and serve as an adviser, Hercules said.
Mark Riddell — an administrator for Bradenton, Florida’s IMG Academy, which was founded by renowned tennis coach Nick Bollettieri and bills itself as the world’s largest sports academy — was suspended from his job late Tuesday after he was accused of taking college admissions tests as part of the scheme.
Riddell didn’t return several phone calls seeking comment.
At the center of the scheme was admissions consultant William “Rick” Singer, founder of the Edge College & Career Network of Newport Beach, California, authorities said. Singer pleaded guilty Tuesday, and his lawyer, Donald Heller, said his client intends to cooperate fully with prosecutors and is “remorseful and contrite and wants to move on with his life.”
Prosecutors said that parents paid Singer big money from 2011 up until just last month to bribe coaches and administrators to falsely make their children look like star athletes to boost their chances of getting accepted. The consultant also hired ringers to take college entrance exams for students and paid off insiders at testing centers to correct students’ answers.
Some parents spent hundreds of thousands of dollars, as much as $6.5 million, to guarantee their children’s admission, officials said.
“These parents are a catalog of wealth and privilege,” U.S. Attorney Andrew Lelling said at a news conference in Boston, where the indictments in the scandal were handed up.
At least nine athletic coaches and 33 parents were charged. Dozens, including Huffman, the Emmy-winning star of ABC’s “Desperate Housewives,” were arrested by midday Tuesday. Huffman posted a $250,000 bond after an appearance in federal court in Los Angeles. Her husband, actor William H. Macy, has not been charged, though an FBI agent stated in an affidavit that he was in the room when Huffman first heard the pitch from a scam insider.
The coaches worked at schools such as Yale, Stanford, Georgetown, Wake Forest, the University of Texas, the University of Southern California and the University of California at Los Angeles.
Stanford’s sailing coach John Vandemoer pleaded guilty Tuesday in Boston. A former Yale soccer coach had pleaded guilty before the documents went public and helped build the case against others.
No students were charged, with authorities saying that in many cases the teenagers were unaware of what was going on. Several of the colleges involved made no mention of taking any action against the students.
Several defendants, including Huffman, were charged with conspiracy to commit fraud, punishable by up to 20 years in prison.
“For every student admitted through fraud, an honest and genuinely talented student was rejected,” Lelling said.
Lelling said the investigation is continuing and authorities believe other parents were involved. The IRS is also investigating, since some parents allegedly disguised the bribes as charitable donations.
The colleges themselves are not targets, the prosecutor said. A number of the institutions moved quickly to fire or suspend the coaches and distance their name from the scandal, portraying themselves as victims. Stanford fired the sailing coach, and USC dropped its water polo coach and an athletic administrator. UCLA suspended its soccer coach, and Wake Forest did the same with its volleyball coach.
Parents spent up to $6.5 million, the FBI says
The sums that authorities say the accused parents paid in bribes would, for many, finance a college education many times over.
Some spent between $200,000 and $6.5 million to guarantee admissions for their children, FBI Special Agent Joseph Bonavolonta said.
The relatives of one applicant paid $1.2 million to have the applicant falsely described as the co-captain of a well-known California soccer team, although the applicant did not play competitive soccer, prosecutors said.
By comparison, the average annual cost of tuition and fees at a private, four-year college is $29,478, the US Department of Education’s National Center for Education Statistics’ most recent report shows.
“This case is about the widening corruption of elite college admissions through the steady application of wealth combined with fraud,” Lelling said. “There can be no separate college admission system for the wealthy, and I’ll add that there will not be a separate criminal justice system either.”
The ringleader got $25 million, US attorney says
Much of the indictment revolves around William Rick Singer, the founder of a for-profit college counseling and preparation business known as The Key.
“OK, so, who we are … what we do is we help the wealthiest families in the US get their kids into school,” Singer told one parent, according to prosecutors.
There were dual avenues for carrying out the scheme, Lelling explained.
“There were essentially two kinds of fraud that Singer was selling,” Lelling said of the accusations, which run from 2011 to 2019. “One was to cheat on the SAT or ACT, and the other was to use his connections with Division I coaches and use bribes to get these parents’ kids into school with fake athletic credentials.”
For example, Singer and his co-conspirators used photo-editing technology to superimpose the face of a patron’s student onto stock photos of athletes, prosecutors said.
Singer was paid roughly $25 million by parents to help their children get in to schools, the US attorney said.
Singer pleaded guilty on Tuesday to racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice, prosecutors said.
Actresses allegedly were taped discussing the plot
Best known for her role on TV’s “Desperate Housewives,” Huffman is accused of paying $15,000 to Singer’s fake charity, the Key Worldwide Foundation, to facilitate cheating for her daughter on the SATs, the complaint says.
Her daughter received a 1420 on her test, which was 400 points higher than a PSAT taken a year earlier without the same administrator, the complaint states.
Huffman also discussed the scheme in a recorded phone call with a cooperating witness, the complaint says.
Huffman has been charged with felony conspiracy to commit mail fraud and honest services mail fraud, according to federal court documents filed Monday in Massachusetts. She was arrested without incident at her California home, the FBI said.
She appeared Tuesday in federal court in Los Angeles, where a judge set her bond at $250,000 and federal agents took her passport. Her next court appearance was set for March 29 in Boston.
Loughlin, who played Aunt Becky on “Full House,” faces the same felony charge. Her husband, Giannulli, was also charged with conspiracy to commit mail fraud and honest services mail fraud.
Loughlin and Giannulli allegedly agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the University of Southern California crew team, even though they did not participate in crew, the complaint said.
The money was given to Singer’s fake charity, and in a recorded phone call, Singer clarified that the money was actually intended for getting their daughters into USC crew, according to the complaint.
Giannulli appeared in court Tuesday, where a magistrate judge set a $1 million bond and ordered him to surrender his passport.
Though she was not present in court, prosecutors and Loughlin’s attorneys agreed on similar terms, as well as permission for her to travel to Vancouver and back for work.
CNN has contacted Iconix Brand Group, which owns Giannulli’s namesake fashion company, Mossimo. CNN also is seeking comment from the actresses’ representatives.
Implicated coaches sidelined at Yale and Georgetown
Coaches from Yale, Stanford, Wake Forest and Georgetown universities and USC, among others, are implicated in the case.
“The Department of Justice believes that Yale has been the victim of a crime perpetrated by a former coach who no longer works at the university,” Yale’s president said in a statement. “The corrupt behavior alleged by the Department of Justice is an affront to our university’s deeply held values of inclusion and fairness.”
The Georgetown coach who was arrested “has not coached our tennis team since December 2017, when he was placed on leave after the Office of Undergraduate Admissions identified irregularities in his recruitment practices and the University initiated an internal investigation,” a university spokeswoman said in a statement.
USC is reviewing the school’s application process, officials said.