Wealth

Federal prosecutors charged dozens of people on Tuesday in a giant college entrance scandal in which wealthy parents, including some high-profile actresses and a slew of business executives, paid bribes and worked with cooperating witnesses to get their children into top colleges across the U.S.

The sprawling investigation made airwaves across the country, as people reacted with shock to the news of some of the countries wealthiest citizens were allegedly buying positions for their kids and consequently cheating other qualified students out of the running.

Justice Department officials said at a news conference in Boston on Tuesday that it’s the biggest college entrance scandal it has ever prosecuted.

Among those charged with fraud are actresses Felicity Huffman, who starred in ABC’s “Desperate Housewives,” and Lori Loughlin, who appeared in ABC’s “Full House,” as well as business executives like Douglas Hodge, a former CEO of Pimco investment management company, and Manuel Henriquez, chairman and CEO of Hercules Technology Growth Capital, whose stock price fell more than 9 percent Tuesday afternoon.

The indictment said that in most instances, students and children were unaware of the bribes and fraudulent activity of their parents, such as doctoring exam scores and creating fake resumes and profiles to up their chances of getting into school. Prosecutors did not charge any students or colleges.

Here’s some key points to how it all went down.

Funneling bribe money into a ‘charitable’ account

The so-called ringleader of the scandal was William Singer, founder of a college preparatory business called the Edge College & Career Network, who was arrested for running the scheme using a fraudulent charity.

His business, also known as The Key, based in California, allegedly helped students cheat on SAT and ACT exams and helped parents bribe coaches at colleges and universities to take their kids without any athletic background.

Singer pleaded guilty Tuesday to four charges: racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the U.S. and obstruction of justice.

According to court documents, those charged used the “facade of the charitable organization” to hide the nature and source of bribe payments. Since Singer’s business The Key is a nonprofit, parents could allegedly wire money into a charitable account while avoiding federal taxes.

Between approximately 2011 and 2018, parents averaged $25 million in bribes to college administrators and coaches, the documents note, to designate their children as pretend recruited athletes or as members of other favored admissions categories, thus “facilitating the children’s admission to those universities.”

Photoshop to make nonathletic kids look athletic

Singer also helped parents submit false and manipulated information about their kids’ athletic abilities, going so far as to Photoshop students’ faces onto athletes’ bodies found on the internet.

One parent submitted both her daughter’s fake SAT score and a profile that falsely said she was a “3-year Varsity Letter winner” in water polo, along with an altered picture, according to the indictment. In another instance, parents paid Singer over $1 million to get their child into Yale with a lie that she was a captain of a soccer team.

In an email recorded in the court documents, Singer wrote: “This girl will be a midfielder and attending Yale so she has to be very good,” requesting he get “a soccer pic probably Asian girl.”

Parents also bribed athletic recruits. Loughlin allegedly “agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits” to the University of Southern California’s crew team.

Cheating on the SATs

Also part of the widespread scandal was indicted parents who helped their children do better on SAT and ACT standardized exams through several means.

These parents paid between $15,000 and $75,000 per test to exam administrators who gave students answers, corrected their work or let others pose for them, according to the indictment.

Huffman used the phrase “Ruh Ro!” after finding out that her daughter’s school would be proctoring the SAT exam. Another parent, William McGlashan Jr., was instructed by Singer to claim his child had a learning disability in order to win him more time to take the exam alone.

According to the indictment, Singer told Gordon Caplan, a co-chairman of international law firm Willkie Farr, on the phone that he’s essentially created a “side door” for wealthy families to get their kids into college, often without the kids ever knowing.

“There is a front door which means you get in on your own,” Singer said. “The back door is through institutional advancement, which is 10 times as much money. And I’ve created this side door in.”

“Nobody knows what happens,” Singer said. “She feels great about herself. She got a test a score, and now you’re actually capable for help getting into a school. Because the test score’s no longer an issue. Does that make sense?”

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