The former CEO of an investment firm was sentenced to nine months in prison for bribing his children’s way into elite universities. It is the longest sentence yet of any parent involved in the college admissions scandal known as “Operation Varsity Blues.” Prosecutors say Douglas Hodge, ex-CEO of Pacific Investment Management Co., or PIMCO, paid $850,000 in bribes to get four of his children into USC and Georgetown University as fake athletic recruits. Prosecutors had recommended sending Hodge, 62, to prison for two years
A federal judge branded the former head of bond giant Pimco a “common thief” and sentenced him to nine months in prison for his role in the sweeping college admissions cheating scandal. Douglas Hodge, who had earlier admitted paying $850,000 in bribes to get four of his seven children admitted to elite colleges, also had his request to serve out part of his sentence at home turned down by the judge.
“I have in my heart the deepest remorse for my actions,” a teary-eyed Hodge told Judge Nathaniel Groton in Boston. “I do not believe that ego or desire for high social standing drove my decision-making. Rather, I was driven by my own transformative educational experiences and my deep parental love.” In his statement, Hodge also absolved his children, saying they “did nothing to deserve the consequences they have suffered as a result of my actions.”
Groton was unmoved. “Mr. Hodge, your conduct in this whole sordid affair is appalling and mind-boggling,” Groton said. “There is no term in the English language that describes your conduct as well as the Yiddish term chutzpah.” Groton then imposed on Hodge, a Dartmouth and Harvard graduate, charged with money laundering and wire and mail fraud charges, the stiffest punishment among 14 parents who have been sentenced thus far. Groton also denied Hodge’s request to split his sentence with home confinement int the palatial Pacific Coast mansion in Laguna Beach, California. He also ordered him to pay $750,000 in fines, and perform 500 hours of community service.
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U.S. District Judge Indira Talwani sentenced actress Felicity Huffman to two weeks in prison for paying $15,000 to get her daughter into college by having someone correct her answers on the SATs. Huffman also received a $30,000 fine and 250 hours of community service. She had pleaded guilty to conspiracy to commit mail fraud and honest services mail fraud. Her lawyers asked for no jail time, one year of probation, 250 hours of community service and a $20,000 fine. Her sentence likely means other parents who’ve pleaded guilty in the nation’s college admissions scandal will spend time behind bars. It could also mean that others who made significantly larger payments will end up with more lenient prison terms than prosecutors say are fair.
During Huffman’s sentence she told the courtroom she was deeply ashamed. Judge Indira Talwani said, “Ultimately, you knew it was fraud, it was not an impulsive act. Trying to be a good mother doesn’t excuse this.” Talwani added that the sentence she handed down was “the right sentence here,” but also told Huffman “You can rebuild your life after this,” the judge said. “You’ve paid your dues.” Huffman will report to prison in six weeks, on October 25. Where she’ll serve her sentence has not been announced and will ultimately be decided by the Bureau of Prisons.
Fifty-two people have been charged as part of the college admissions bribery scandal known as “Varsity Blues.” Of the 52 people charged in the scandal, 35 are parents. Fifteen, including Huffman, have pleaded guilty in deals with prosecutors, while 19, including actress Lori Loughlin, have pleaded not guilty and are preparing for trial. Rick Singer, the mastermind of the nationwide college admissions scandal, was paid to have cheat on their children’s SAT or ACT while others paid substantially more to get their children falsely tagged as athletic recruits as a way into prestigious schools. Huffman is the first parent to be sentenced and prosecutors sought one month prison time for Huffman. Prosecutors are pushing for longer sentences for other defendants — more than three years in some cases.
The next parent to be sentenced in Boston federal court is Devin Sloane, CEO of Los Angeles-based waterTALENT. He pleaded guilty to paying $250,000 to Singer’s sham nonprofit to falsely designate his son as a water polo player to gain acceptance into the University of Southern California. Prosecutors are seeking one year in prison for Sloane. Sloane’s hearing is scheduling for September 24th. Two days later, Stephen Semprevivo, a former executive at Cydcor, also based in Los Angeles, will be sentenced. He pleaded guilty to paying $400,000 to Singer to get his son admitted into Georgetown University as a fake tennis recruit. Prosecutors have asked that Semprevio receive 15 months in prison.
Both upcoming cases will reveal whether the judge treats the recruiting scheme the same as the testing scam, and whether she comes down harder on parents who paid more to Singer. Longer sentences could be in store for parents who participated in the recruitment scheme because it had a more “direct effect” on the admissions process than test tampering. Such parents, including Loughlin, accused of paying $500,000 to Singer, have argued they made “legitimate donations” to Singer’s nonprofit, which they said had a history of donating to colleges.
Prosecutors have argued parents who paid more money to Singer should receive longer prison terms. An order by the judge released hours before Huffman’s sentencing could cap sentences at six months for parents regardless of their how much they paid. Judge Talwani ruled against the government’s request to sentence defendants under the federal commercial bribery statute, which allows more severe sentences depending on the amount of money paid. Instead, all sentences will be based on fraud statute guidelines, which recommend six months or less in prison for the offense.
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Hollywood actresses and a slew of chief executives are among 50 wealthy people charged in the largest college cheating scam ever prosecuted by the U.S. Department of Justice. Those indicted in the investigation, dubbed “Operation Varsity Blues,” allegedly paid bribes of up to $6.5 million to get their children into elite colleges, including Yale, Stanford, Georgetown and the University of Southern California, federal prosecutors said.
At a news conference, Andrew Lelling, the U.S. attorney for the District of Massachusetts said “This case is about the widening corruption of elite college admissions through the steady application of wealth combined with fraud. There can be no separate college admissions system for the wealthy and, I’ll add, there will not be a separate criminal justice system either.” Lelling said “The parents charged in the case are a catalog of wealth and privilege. They include, for example, the CEOs of private and public companies, successful securities and real estate investors, two well-known actresses, a famous fashion designer and the co-chairman of a global law firm.”
The ringleader of the scam is William Singer, owner of a college counseling service called Key Worldwide Foundation and a company called Edge College & Career Network. Singer allegedly accepted bribes totaling $25 million from parents between 2011 and 2018 “to guarantee their children’s admission to elite schools.” Singer, of Newport Beach, California, pleaded guilty in a Boston federal court on charges of racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice.
Steven Masera, 69, the accountant and financial officer for the Edge College & Career Network and the Key Worldwide Foundation, was also indicted. Mark Riddell, a private school counselor in Bradenton, Florida, and Masera allegedly worked closely with Singer in the scam, according to the indictment. According to the indictment, Mikaela Sanford, 32, of Folsom, California, another employee of the Edge College & Career Network and the Key Worldwide Foundation, and David Sidoo, 59, of Vancouver, Canada, were also indicted for allegedly working closely with Singer to facilitate the scam.
Singer would allegedly instruct parents to seek extended time for the children to take entrance exams or obtain medical documentation that their child had a learning disability, according to the indictment. The parents were then told to get the location of the test changed to one of two testing centers, one in Houston and another in West Hollywood, California, where test administrators Niki Williams, 44, of Houston and Igor Dvorskiy, 52, of Sherman Oaks, California, helped carry out the scam, the indictment alleges. Riddell, 36, allegedly took ACT and SAT tests for students whose parents had paid bribes to Singer. Singer typically paid Riddell $10,000 for each student’s test.
Singer also allegedly bribed school coaches to give to his clients’ admissions slots reserved for student athletes in sports including crew and soccer. He went as far as to stage fake photos of his student clients engaging in sports they never played, or to digitally place the faces of his clients onto images found online of athletes.
Others charged in the probe include nine coaches at elite schools, two SAT and ACT exam administrators, one exam proctor, a college administrator and 33 parents, including actresses Felicity Huffman and Lori Loughlin. Robert Zangrillo, 52, of Miami, founder and CEO of the private investment firm Dragon Global; Bill McGlashan, 55, of Mill Valley, California, a businessman and international private equity investor; Gordon Caplan, a New York attorney; and Gregory Abbott, 68, founder and chairman of International Dispensing Corp., a New York food and beverage packaging company, and his wife, Marcia Abbott, 59.
Huffman’s husband, actor William H. Macy, was not indicted, but according to the court document he and Huffman were caught on a recorded conversation with a corroborating witness in the case, allegedly discussing a $15,000 payment to ensure their younger daughter scored high on a college entrance exam. Actress Lori Loughlin and her fashion designer husband Mossimo Giannulli allegedly paid $500,000 to USC to have their two daughters falsely designated as crew recruits, though neither daughter ever participated in the sport.
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