Operation Varsity Blues, the multi-million dollar college admissions scandal involving 52 defendants, including celebrities, coaches, college admissions and business people, holds the dubious distinction of being the largest college admissions scandal in the history of the United States.
The mastermind orchestrating the bribes, William “Rick” Singer, CEO of his charity, the Key Worldwide Foundation, funneled portions of $25 million in bribes to coaches, college admissions, test takers and others so those parents of means could buy entry for their children into some of the country’s most prestigious colleges and universities.
Parents move the fraud
While their parents offered bribes from $50,000 to millions of dollars to buy them spots, in most cases the potential students themselves were unaware of their parents’ fraudulent actions.
As United States Attorney for the District of Massachusetts, Andrew E. Lelling, said, the parents are the prime movers of this fraud “… using their wealth to create a separate and unfair admissions process for their children.”
In all, 29 out of 52 total defendants, including 19 parents, have so far waived their rights to a trial and pleaded guilty to crimes in deals with prosecutors.
Over a dozen parents have been sentenced, with more sentences expected early this year. Another 23 defendants have pleaded not guilty and will in all likelihood face long legal battles and tough sentencing.
Fuller House actress Lori Laughlin may face up to 45 years in prison for paying Singer $500,000 to get her daughters into the University of Southern California. Ms. Loughlin, who claims she was told by Singer that the money she paid him was to benefit the University of Southern California (USC), may face up to 45 years in prison for her alleged role in the college admissions scandal.
Sending a message
Sending a strong message that bribes don’t pay, Douglas Hodge, the retired chief executive of Pimco, who pleaded guilty to two counts, money laundering conspiracy and conspiracy to commit mail and wire fraud and honest services mail and wire fraud, was recently sentenced to nine months in prison. He paid $850,000 in bribes over a decade to Singer to get four of his seven children into prestigious schools. He was working on getting a fifth child accepted.
A generous philanthropist, Mr. Hodge said, “I have in my heart the deepest remorse for my actions.”
However, in spite of his repentance, before imposing sentence the judge in the case, Judge Nathaniel M. Gorton, told Mr. Hodge, “There is no term in the English language that describes your conduct as well as the Yiddish term of chutzpah, … You need to pay a significant and conspicuous price for unconscionable, egregious criminal conduct in order to deter you and others who can afford it from the blatant misuse of your good fortunes.”
People lie
In a previous post on human behavior, lying and cheating I quoted Tyler Durden, writing for Zero Hedge who asked, “Is there anything left in this country that has not been deeply tainted by corruption?”
He points out the present degeneration of morals and values and states, “it is not fashionable to talk about “morality” and “values” these days, but the truth is that history has shown that any nation that is deeply corrupt is not likely to survive for long.”
Mr. Durden is prophetic. The 2019 Corruption Perceptions Index recently released by Transparency International, which ranks countries “by their perceived levels of corruption, as determined by ‘expert assessments’ and opinion surveys,” highlights the relationship between politics, money and corruption. It notes that the United States, scoring 69, has received its lowest score in eight years and marks the first time since 2011 that the U.S. falls outside of the top 20 countries on the index.
Is it enough?
In what way is the message being given to these parents meaningful? Is it enough? Will others be deterred from doing more of the same? Is the message to not lie, cheat and steal getting through to us all, or is it just don’t get caught?
I’m reminded of Dr. Dan Ariely’s experiments, the results of which he discusses in one of his books, The (Honest) Truth About Dishonesty: How We Lie To Everyone — Especially Ourselves. In a conversation with NPR’s Robert Siegel he noted that society’s troubles aren’t always caused by the really bad apples; they’re caused by the scores of slightly rotting apples who are cheating just a little bit.
“The standard view is a cost/benefit view. It says that every time we see something, we ask ourselves: What do I stand to gain from this and what do I stand to lose? What’s the chance that somebody will catch me and how much time will I have in prison?”
He says we basically look at the cost and benefit, and, “… if it’s a good deal, you go for it.”
The tough sentencing on the Varsity Blues parents, may stop college admissions bribery for the short term, but will it stop the steady erosion of integrity and ethics overall? What do you think?
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
