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Potential Fallout From The Latest FBI-Investigated College Sports Scandal

If any athletic programs received funds through the bribes the FBI investigated, expect NCAA punishments to follow. That and more potential ripple effects from the massive college admissions controversy.

The latest scandal to rock the world of college sports doesn’t concern elite athletes. In fact, the athletes at issue may not even be athletic, let alone worthy of playing college sports. That point is integral to a new legal controversy involving a wide range of figures, from Hollywood celebrities to college coaches. They are all accused of illegally manipulating the admissions process for student-athletes at prestigious universities.

On Tuesday, U.S. Attorney Andrew Lelling and other officials from the Justice Department revealed that 50 defendants face charges for racketeering, money laundering, wire fraud and related offenses in federal court in Boston. The defendants are accused of partaking in a fraudulent scheme whereby a college counseling company arranged for exam ringers to alter the SAT and ACT experience for children of affluence. Armed with inflated and unearned exam standardized test scores, the children were then guided into elite universities through bribes to coaches and university administrators. Some bribes totaled in the millions of dollars.

The charges follow a 10-month Justice Department probe dubbed “Operation Varsity Blues.”

The great scam: the student-athlete who shouldn’t be a student and probably isn’t an athlete

The mastermind of the alleged racket is Rick Singer, the 58-year-old owner of the for-profit college counseling company Edge College & Career Network and CEO of the non-profit Key Worldwide Foundation. Singer pleaded guilty on Tuesday to racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice.

Over the last decade, Singer developed a multi-step, yet nonetheless straightforward, scheme.

First, Singer arranged for his clients—parents of high school students—to falsely claim that their children suffer from learning disabilities. The parents were guided by Singer on how to secure the necessary medical documentation to verify such a “medical condition.”

Second, the parents would request from SAT and ACT exam administrators that their children receive extended exam time. The justification for the request would be the (falsely) verified learning disabilities. Such requests are commonly granted on the basis that students with learning disabilities warrant extra time. Such extra time is thought to level an exam’s playing field. Of course, if a student doesn’t really have a disability and is nonetheless awarded extra time, he or she gains an unfair advantage and places competing students in a disadvantaged position.

Third, once the extended time was granted, the parents would request a change in venue for the exam so that their children would take it in one of two test centers: a public high school in Houston, Texas, or a private college preparatory school in West Hollywood, Calif.

Fourth, before the children take the exam, Singer would bribe administrators at those two test centers. The bribe would enable a person who might be described as an exam “ringer” to take the test in lieu of a child, or to provide a less obvious form of cheating. 36-year-old Mark Riddell is accused of usually being the person who took the exam instead of a high school aged boy or girl. Alternatively, in some cases, the child would take exam, but Riddell would provide him or her correct answers during the test. In still other cases Riddell is accused of simply “fixing” the answers after the test was completed.

Along the way, both Singer and Riddell were allegedly paid—and paid quite well. The Justice Department contends that Singer’s clients paid him “between $15,000 and $75,000 per test.” These payments were not made directly to Singer. Instead, Singer instructed the parents to “donate” these funds to his charity, Key Worldwide Foundation. This arrangement effectively lowered the financial cost for the parents since they could write-off the donation on their taxes (and thereby commit federal tax fraud). As for Riddell, Singer allegedly paid him about $10,000 per test.

Singer’s alleged cheating services didn’t end with inflated SAT or ACT scores. The Justice Department contends that he developed contacts with numerous coaches and university administrators. Using clients fund, Singer would bribe his contacts to ensure that the school recruits his clients’ children as supposed athletes. Such “side door” bribes apparently totaled $25 million over the last eight years. These payments, prosecutors contend, allowed for students to gain admissions into such elite universities as Yale, Stanford, Georgetown, USC and Wake Forest. These students would be labeled “athletic recruits” but wouldn’t be athletes. Nonetheless, they would secure ill-gotten opportunities to study at universities under the guise of playing a sport such as sailing, tennis, water polo, soccer or golf.

To advance the fake student-athlete scheme, Singer created fictitious athletic “profiles” of his clients’ children. The profiles contained made-up athletic honors and staged photos, such as those involving clients’ children “using a rowing machine or purportedly playing water polo.”

Noteworthy defendants

With 50 names, the list of defendants is long. Some of the names, particularly those of the “clients”, are eye-catching. Client defendants include award winning actresses Felicity Huffman and Lori Loughlin as well as a number of CEOs, business owners, entrepreneurs, attorneys and investors. Coaches who are accused of taking bribes are also named defendants. They include former Stanford's sailing coach John Vandemoer, former Yale women's soccer coach Rudy Meredith, former Georgetown tennis coach Gordie Ernst, current Texas men's tennis coach Michael Center and current UCLA men's soccer coach Jorge Salcedo.

To illustrate the defendants’ alleged crimes, consider steps allegedly taken by Loughlin and her husband, fashion designer Mossimo Giannulli. According to prosecutors the couple “agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC crew team—despite the fact that they did not participate in crew—thereby facilitating their admission to USC.” Purported evidence against Loughlin and Giannulli include transcripts of secretly recorded phone calls in which the scheme was plotted.

Or take defendant Robert Zangrillo, owner of an investment firm focused on venture capital. He is accused of bribing athletic department officials at USC so that his daughter would be deemed an “athletic recruit” and thus gain an edge in admissions. Zangrillo also allegedly paid for another person to take classes for his daughter and thus boost her GPA.

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As a final example, consider defendant Elisabeth Kimmel, who is described as a media company executive. Prosecutors contend that she bribed Georgetown officials to help her daughter gain admissions as a Hoyas tennis player. She is also accused of bribing officials at USC to help her son become a member of the Trojans’ track team. The scheme apparently went beyond Kimmel and extended to at least one of her children. To that point, in her application to Georgetown, Kimmel’s daughter allegedly claims that she was a ranked tennis player. The U.S. Tennis Association has no record of her ranking.

The evidence and the charges

It is immediately apparent in reading the charging documents that the government possess a treasure trove of evidence. This dynamic reflects the contributions of three cooperating witnesses. These three witnesses have pleaded guilty and hope to obtain leniency when sentenced by U.S. District Judge Judge Rya Zobel. The leniency would reflect providing information to prosecutors that includes emails, documents and recordings. In addition, sworn statements of the cooperating witnesses have been procured. Additional evidence appears to have been obtained by the government through search warrants executed on bank records and emails as well as court-authorized wiretap recordings and consensual recordings.

Although the cooperating witnesses aren’t named in the criminal complaint, they are described in ways that suggest their identity. Most notably, Singer—the racket’s ring leader—pleaded guilty on Tuesday. That was no doubt a frightening turn of events for his many clients. He presumably shared with the FBI his client records, which were in turn used to charge his clients with crimes. Those clients’ attorneys will argue that Singer cut a deal to save himself and thus his claims should be viewed with suspicion.

In addition, Vandemoer, the 41-year-old former Stanford sailing coach, pleaded guilty, with prosecutors recommending an 18-month sentence for him. The criminal complaint suggests that others might plead guilty as well.

The charges faced by the non-cooperating defendants are extremely serious. The charges threaten the defendants with the prospect of spending decades in prison. Consider the allegedly bribed coaches. They have been charged with federal racketeering conspiracy. This type of charge refers to defendants allegedly conspiring to partake in fraudulent moneymaking schemes, such as bribery and kickbacks. The maximum prison sentence for a conviction is 20 years in prison, three years of supervised released and a fine of $250,000 and restitution.

As to Singer’s clients, they face mail and wire fraud charges. Such charges refer to using the postal service or wire communications—such as bank transactions as well as phone calls, emails and texts—to convey false pretenses or false promises in order to deceive a victim of its assets, money or property. The maximum prison sentence for a conviction is 20 years in prison, three years of supervised released and a fine of $250,000 and restitution.

These are serious crimes. Even if the defendants wouldn’t be sentenced to anywhere near 20 years in prison, the threat of any prison time is no doubt alarming.

Odds are many, if not most of the defendants, will eventually reach plea deals with prosecutors. Keep in mind, approximately 90% of defendants in federal prosecutions plead guilty rather than go to trial. This pattern reflects a number of things, perhaps most importantly federal defendants’ well-founded fear of being convicted in a trial and losing on appeal: federal prosecutors secure convictions in somewhere between 85% and 95% of trials and only approximately 7% of federal criminal convictions are reversed on appeal.

Perhaps the defendants in this prosecution will test the odds. Given their wealth, they will be able to assemble legal teams and retain expensive law firms that the vast majority of defendants could not afford. Still, the odds are never encouraging when the other side is the Justice Department.

The academic and athletic fallout: how schools and the NCAA could respond

Operation Varsity Blues clearly goes far beyond sports. It reflects the willingness of parents of means to take illegal steps so that their children, who may be good but not great college applicants, can attend elite universities. Much has been written in recent years about the increasingly competitive nature of college admissions and the extreme willingness of some parents—sometimes dubbed “helicopter parents”—to help their children. The parents who are defendants in Operation Varsity Blues have allegedly gone a step further to commit federal felonies.

In response to the scandal, universities will need to review how their coaches and academic administrators are monitored and evaluated. It appears that the scam went on for eight years. This means that multiple iterations of university president, provosts, deans and athletic directors failed to detect wrongdoing or missed warning signs. To that point they may demand reform by SAT and ACT test centers to ensure that standardized exams are not gamed by cheaters.

In addition, universities might reconsider whether and how they verify claims of athletic achievement made by applicants. To be sure, schools like Georgetown and USC attract tens of thousands of applications each year. It might not be reasonable or practicable to attempt to verify each and every claim. Still, it appears that students have lied about fairly easy-to-verify matters, such as whether someone is actually ranked by the USTA as a tennis player.

Universities might also review whether to expel students who partook in the cheating scam. Based on the criminal complaint’s depiction, it appears that some students were not aware or were not fully aware of the cheating, while others were more active participants. Expect university academic rules and honor codes to come into play. Admissions offices will likely be tasked with reviewing applications of students whose parents have been charged and determining whether those students falsely attested to awards and achievements. For the currently enrolled students whose parents allegedly used bribes to get them admitted, they ought to become intimately familiar with their schools’ academic and honor code rules. They might also be advised to retain an attorney.

Universities will also be thinking about the scheme’s victims. While no one was physically injured by the pay-for-admission scheme, there are students who were wrongly denied admissions to elite schools or membership on sports teams. To the extent those students attempt to transfer to their preferred schools, maybe admissions offices will be a bit more willing to admit them.

As to the NCAA, it issued a statement on Tuesday pledging to investigate whether NCAA rules were violated. If any athletic programs received funds through the bribes, expect NCAA punishments to follow.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.