Authorities call the largest college-admissions fraud ever.
A newly unsealed federal indictment shows how a probe dubbed “Operation Varsity Blues” entangled a Stanford University coach and several wealthy Silicon Valley families.
The 200-plus pages of charging documents offer a glimpse into a world of money and influence, where affluent parents shell out tens of millions of dollars in bribes to buy placements at top colleges for their underachieving children.
In a news conference Tuesday, the U.S. Attorney’s Office in Massachusetts called it the biggest such scam ever prosecuted by the Department of Justice, which implicated a vast network of Hollywood celebrities, high-profile entrepreneurs and investors, doctors and executives and even professional athletes.
The complaint levels fraud charges against six Peninsula residents: Hercules Capital CEO Manuel Henriquez and wife Elizabeth Henriquez of Atherton, Amy and Gregory Colburn of Palo Alto and Menlo Park residents Marjorie Klapper and Peter Jan.
Bill McGlashan, founder of TPG Growth and a leading voice in Silicon Valley about how to invest ethically, has also been charged with engineering his son’s admission into the University of Southern California. Private equity firm TPG placed McGlashan on leave hours after word got out about his involvement in the scandal.
Actresses Felicity Huffman and Lori Loughlin, whose children attend some of the universities mentioned in the case, were also indicted.
Stanford University’s lead sailing coach John Vandemoer, one of 50 people named in the federal investigation, has agreed to plead guilty to a charge of racketeering for his role in the scheme. In a statement issued Tuesday, Stanford confirmed that it has fired Vandemoer, who spent more than a decade of his career at the university.
“Stanford has been cooperating with the Department of Justice in its investigation and is deeply concerned by the allegations in this case,” school officials stated. “The university and its athletics programs have the highest expectations of integrity and ethical conduct. The head coach of the Stanford sailing team has been terminated.”
Though Vandemoer stands accused of taking bribes in exchange for recommendations of two prospective students ($110,000 for one kid and $500,000 for his replacement), the school claims that neither stayed long at Stanford.
“However, the alleged behavior runs completely counter to Stanford’s values,” the statement noted. “Based on the Department of Justice investigation to date, we have no evidence that the alleged conduct involves anyone else at Stanford or is associated with any other team. However, we will be undertaking an internal review to confirm that.”
In detailed narratives interspersed with email excerpts and phone transcripts, the feds paint college counselor William Singer as the ringleader of the pay-to-play enterprise.
Singer, a Long Beach resident, ran a company called the Edge College and Career Network LLC (known as The Key) through which he facilitated fraudulent college admissions for about 800 families from 2011 to 2018, authorities say. Those involved reportedly called it getting in through the “side door,” as opposed to “front door” by merit or “back door” by institutional advancement.
Authorities say clients laundered payments to Singer as donations to a nonprofit that claimed to help underserved kids. In return, he allegedly carried out his racket by, among other tactics, falsifying scores and fabricating athletic records out of whole cloth to make sure his clients’ progeny weaseled their way into prestigious universities.
Singer, who purported to be a sort of life coach, allegedly had several ways of getting clients’ kids ahead of the pack. Investigators say he would get parents to finagle a phony learning disability diagnosis to get their children extra time to take the SAT or ACT.
In other instances, he allegedly bribed proctors to alter test results. Another tack involved creating fake sports profiles so students could get into college as athletic recruits in lower-profile sports, as the New York Times noted in its report on the indictment.
In McGlashan’s case, authorities allege, he authorized Singer to Photoshop his son’s face on the body of a football player to trick Stanford and the University of Southern California that his son had experience in a sport he never played.
“He does have really strong legs,” McGlashan told Singer, according to charging records. “Maybe he’ll become a kicker. You never know.”
The Henriquezes reportedly tried to get their daughter into Georgetown University by passing her off as some kind of top-ranking tennis champ when reality proved otherwise. A particularly cutting footnote states: “At her best, she appears to have ranked 207th in Northern California in the under-12 girls division, with an overall win/loss record of 2-8.”
Menlo Park jeweler Marjorie Klapper allegedly hired someone for $15,000 to help her son cheat his way to college while Menlo Park businessman Peter Jan coughed up the same amount to make sure a special proctor presided over his daughter’s test. Palo Alto oncologist Greg Colburn and wife Amy took a similar route, according to prosecutors, paying a stand-in $25,000 to take their son’s college entrance exam for him.
Boston U.S. Attorney Andrew Lelling said the probe remains underway, which means the public will be treated to even more of these character studies on what he characterized as the corrupting force “of wealth and privilege.”
“This case is about the widening corruption of elite-college admissions through the steady application of wealth combined with fraud,” the prosecutor told reporters at Tuesday’s widely televised presser. “There can be no separate college-admission system for the wealthy, and I’ll add there will not be a separate criminal-justice system either.”