Numerous local parents and a Stanford University coach are among the dozens indicted in a nationwide college-admissions investigation that involved alleged bribes totaling $25 million in exchange for help getting students into top universities, the U.S. Attorney's Office in Boston announced Tuesday.
At least one parent paid $6.5 million, according to federal prosecutors.
The wide-ranging case, dubbed "Operation Varsity Blues," is the "largest college-admissions scam ever prosecuted by the Department of Justice," U.S. Attorney for Massachusetts Andrew Lelling said at a press conference Tuesday.
Stanford head sailing coach John Vandemoer is one of 50 people indicted in the scandal, which involved rigging the admissions system to help the children get into the nation's elite universities. The scam included bribes, a sham charity organization, falsified athletic profiles and cheating on SAT and ACT scores, among other alleged crimes, Lelling said.
The other coaches were from Yale University, the University of Southern California, Wake Forest University and Georgetown University, among other universities, federal prosecutors said.
Among the indicted are 33 parents, whom Lelling called "a catalog of wealth and privilege." They include CEOs of private and public companies; securities and real estate investors; and the chair of a global law firm. Actresses Felicity Huffman and Lori Loughlin, whose children were admitted to the universities, were also indicted.
"In return for bribes, these coaches agreed to pretend that certain applicants were recruited competitive athletes when in fact the applicants were not, as the coaches knew the student's athletic credentials had been fabricated," Lelling said.
The DOJ complaint charges six Midpeninsula residents with conspiracy to commit mail and wire fraud: Palo Alto residents Amy Colburn, 59, and Dr. Gregory Colburn, 61; Menlo Park residents Marjorie Klapper, 50, co-owner of jewelry business M&M Bling in Palo Alto, and Peter Jan Sartorio, 53, a packaged food entrepreneur; and Atherton residents Elizabeth Henriquez, 56, and Manuel Henriquez, 55, who was CEO of venture capital and private equity firm Hercules Capital in Palo Alto until his voluntary resignation announced Wednesday in a company press release. (View a full list of the individuals indicted here).
Other Bay Area residents indicted have business and community ties with the Midpeninsula. Marci Palatella, 63, of Healdsburg, is a longtime donor to Sacred Heart Schools in Atherton where an athletic field was named after her family. She is the CEO of liquor distribution company Preservation Distillery in Kentucky, which falls under her Burlingame-based company Allied Lomar Inc. (also known as International Beverage), and wife of Lou Palatella, a former player for the San Francisco 49ers.
Hillsborough residents Davina Isackson, 55, and Bruce Isackson 61, president of commercial real estate firm WP Investments in Woodside, were also charged.
Two SAT and ACT exam administrators, an exam proctor, a college administrator and nine coaches were also charged.
The exam administrators allegedly allowed a test taker to secretly complete the tests for the students or correct their answers after completing the exam, according to the U.S. Attorney's Office.
Vandemoer pleaded guilty to a charge of information with racketeering conspiracy Tuesday afternoon in Boston, Lelling said. A federal court document dated March 5 indicates he was engaged in the alleged conspiracy from about 2016 to last February.
He is scheduled for sentencing on June 12. Under a plea agreement, Vandemoer faces up to 20 years in prison, three years of supervised release and a $250,000 fine.
Newport Beach resident William "Rick" Singer, 58, the "alleged mastermind" behind the scheme carried out between 2011 and last month, also pleaded guilty Tuesday in Boston. Singer, who has worked in the college counseling business, allegedly used his connections with Division I coaches and parents to create the fake athletic credentials. He has been charged with racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice.
Singer faces up to 65 years in prison, three years of supervised release, a $1.25 million fine and $400 in mandatory special assessment fees when he is sentenced on June 12.
The coaches allegedly used the credentials to convince fellow athletic department staff that the admitted student was a good fit for their team, according to Lelling.
No students have been charged in the case nor have the universities to which they were admitted, Lelling said. A vast majority of the admitted applicants are current students.
In a statement Tuesday, Stanford University stated it has terminated Vandemoer's employment and is cooperating with the Department of Justice's investigation.
"The alleged behavior runs completely counter to Stanford's values," the university announcement stated.
The complaint against Vandemoer alleges he entered into agreements with Singer to designate two student applicants as Stanford sailing recruits. Those students, however, ended up not attending the university.
The first agreement was entered into in summer 2017, when one applicant was purported to be a competitive sailor. Last May, the student deferred his application for a year, and the Stanford sailing program received a $110,000 payment to list the recruit in the following year's cycle.
When the first deal fell through, Vandemoer allegedly agreed to give the same spot in the sailing program to another applicant for $500,000. The second recruit was listed as a competitive sailor but had "minimal sailing experience," and in the end didn't attend Stanford, according to the charging document. Vandemoer allegedly accepted $160,000 from Singer to use the funds "for a future student's purported recruitment."
Before his work termination, Vandemoer was in the middle of his 11th year as Stanford's head sailing coach, according to his profile on Stanford Athletics website. Under his tenure, the team won 29 of 30 Pacific Coast Collegiate Sailing Conference championships. He previously served as head coach for the U.S. Naval Academy from 2006 to 2008, when he led the Midshipmen to five national championship appearances.
Stanford stated it does not have evidence that other members of the university were involved in the alleged conspiracy, based on the federal investigation to date, and will conduct an internal review to ensure no other members of the university were involved.
Stanford University President Marc Tessier-Lavigne and Provost Persis Drell issued a statement through the "Notes from the Quad" blog, emphasizing that the alleged behavior by the indicted in the federal case are "absolutely contrary to Stanford's values, and to the norms this university has lived by for decades."
They detailed the university's admissions process, which considers a student's academic performance, extracurricular activity and "personal context" in selecting who is awarded admission. "Special talents," which includes athletics, is also factored in through coaches who pinpoint promising recruits to the admission office for review, but "by themselves never ensure admission to Stanford."
Tessier-Lavigne and Drell also wrote that they will make sure the university doesn't benefit from the funds made to the Stanford sailing program as part of the scheme.
As of Tuesday morning, 38 individuals have been taken into custody, seven are working toward surrendering to authorities and four are expected to plead guilty — two Tuesday and two others in the coming weeks, according to FBI Special Agent in Charge Joseph Bonavolonta.
Hundreds of investigators have been looking into the allegations since last May as a result of an unrelated cover-up investigation. All the individuals charged played a role in "corruption and greed," Bonavolonta said. The case robbed students nationwide of getting a fair shot at attending elite universities, he said.
"Today's arrests should be a warning to others. You can't lie and cheat to get ahead because you will get caught," Bonavolonta said at Tuesday's press conference.
Singer allegedly set up a charity, Key Worldwide Foundation, through which to funnel the bribes, according to Special Agent in Charge Kristina O'Connell of the IRS Criminal Investigation in Boston. The contributions were deducted from the parents' federal income taxes, the U.S. Attorney's Office said.
Singer conducted his college counseling and preparation work through his business Edge College & Career Network LLC, which was also known as The Key, according to federal prosecutors. He allegedly told his clients to request their student take additional time on the test by claiming their child had learning disabilities, the U.S. Attorney's Office said. They were also told to change their test center to either one in Houston, Texas or West Hollywood, where one of two test administrators took the bribes, around $10,000 per test, in exchange for allowing the cheating that often took place in a one-on-one setting.
Parents paid between $250,000 to $6.5 million to make sure their students were admitted to a top university, according to the U.S. Attorney's Office. A total $25 million in bribes was uncovered, according to federal prosecutors.
In one testimonial posted on The Key website, local parent Marci Palatella thanked Singer for his work with her son.
"My kid who could not read a poem in front of the class is now...in a comedy troupe!!! He is so happy about school! You were life changing for all of us," she wrote. "Your subtle style made us all comfortable, but it was your deep down encouragement that let him know there was hope for greatness. Bottom line is that you believed in him, and that made all the difference. For my kid to be getting A's plural... is incredible."
This is a developing story; more information will be added as it becomes available.