College scandal leads to fraud and conspiracy charges

The college admissions scandal has resulted in unprecedented – and extremely serious – felony charges. “Operation Varsity Blues” led to grand jury indictments of dozens of parents, coaches and administrators across the country.

Rich parents buying their kids’ way into elite schools is hardly new – why is it suddenly a federal offense? Will “Aunt Becky” and other jet-setter defendants really go to jail? Let’s take a closer look at the criminal charges.

Honest services fraud? Money laundering?

The scandal broke on March 12 when the Justice Department issued arrest warrants for dozens of parents, several college coaches and other individuals. Millions of dollars in bribes allegedly changed hands to get high school seniors accepted into prestigious universities including Harvard, Yale and Stanford.

The various schemes included cheating on SAT and ACT exams, faking athletic credentials, and funneling bribes through a phony charity. As the tawdry tales unfolded, no one was shocked that wealthy parents would use their money and influence to get Junior or Missy into the school of their choice. The surprising part was that it resulted in major criminal charges commonly associated with organized crime:

  • Honest services fraud – Bribery is not a victimless crime. Paying off a public official corrupts the institution and the presumption of a level playing field. For every student who was admitted to college through bribes or deceit, another honest and hard-working candidate was deprived of those intangible “honest services.”
  • Mail fraud and wire fraud – It is illegal to use the U.S. Postal Service in furtherance of a crime. It also illegal to use wireless communications (phone calls, texts and emails, wire transfers) in planning or perpetrating a crime. These are not lesser or tacked-on charges. Many “white collar criminals” are ultimately convicted of wire or mail fraud, which are punishable by up to 20 years in prison.

Round Two brought additional felony charges

About a dozen of the accused entered plea agreements, including actress Felicity Huffman, who allegedly paid a $15,000 bribe to falsify her daughter’s SAT score. Since then, the DOJ has upped the ante on the remaining defendants. A new superseding indictment on April 9 added two very serious counts to the existing charges:

  • Conspiracy to commit fraud – When two or more people concoct a crime together, and at least one of them takes some action to put the plan in motion, they can face additional charges of criminal conspiracy. A conviction carries up to 5 years in prison.
  • Money laundering – Money laundering is a scheme to hide the source of ill-gotten money through financial transactions. The indictments claim that some of the parents paid money to a private foundation or a for-profit corporation that were essentially conduits for bribes to the ringleader and other willing participants of the scam. Some of those parents subsequently claimed their “charitable” bribes as tax-deductible donations, according to the FBI. Money laundering carries up to 20 years in prison, plus fines up to twice the amount of laundered funds.

Plead guilty or fight the charges?

TV actress Lori Laughlin and her fashion designer husband Mossimo Giannulli are among the defendants facing expanded charges after passing up plea deals. Because of the multiple offenses and the magnitude of their alleged fraud ($500,000), prosecutors are seeking prison time. These are the wrenching choices that must be weighed, in consultation with a defense lawyer, when considering whether to negotiate a plea or take one’s chances at trial.