MBA Graduates Among 50 Accused In $25 Million College Admission Scam In The US

At least three MBA graduates from Harvard and one from Stanford, are among the 50 accused in a $25 million bribery scandal, stated to be the biggest college admissions scam ever prosecuted by the U.S. Justice Department.

TPG private equity partner William McGlashan Jr. (MBA 1990 Stanford), Douglas M. Hodge, a Harvard MBA and former chief executive of PIMCO, John B Wilson, President and CEO, Hyannis Port Capital, Inc., have been charged with helping prospective students cheat on college admission tests and bribe coaches to inflate their athletic credentials.

• At least three MBA graduates from Harvard and one from Stanford, are among the 50 accused in a $25 million bribery scandal on college admissions.
• TPG private equity partner William McGlashan Jr. (MBA 1990 Stanford) and Douglas M. Hodge, a Harvard MBA and former chief executive of PIMCO, have been charged with helping prospective students cheat on college admission tests and bribe coaches to inflate their athletic credentials.
• William Singer, the alleged mastermind, was stated to have used his Edge College & Career Network and an affiliated non-profit to help 33 wealthy parents secure admission for their children.
• The indictment also names two actresses, Felicity Huffman, Lori Loughlin and the latter’s fashion designer husband Mossimo Giannulli.
• The scandal has not only tarnished the image of the schools but also exposed the weak spots in the admission process.

Meanwhile, Stanford has placed McGlashan on leave from the school’s Advisory Council pending the outcome of the charges. “The alleged behaviour falls far short of the ethical conduct we expect of any member of the GSB community, and especially one serving the school in an important capacity,” GSB Dean Jon Levin said he in an email on March 13 to the school’s community.

William Singer, the alleged mastermind, was stated to have used his Edge College & Career Network and an affiliated non-profit to help 33 wealthy parents secure admission for their children. He has pleaded guilty in federal court to a cheating scheme that included bribing SAT test proctors and college coaches, says John A. Byrne in an article on Poets & Quants website.

The indictment also names two actresses, Felicity Huffman, Lori Loughlin and the latter’s fashion designer husband Mossimo Giannulli.

Singer is reported to have used several methods, including using a stand-in to appear for an exam for one candidate, pasting the applicant student’s head on the body of an athlete, bribing sports coaches and paying up to $75,000 for falsified exam results, for admission to Yale, the University of Texas at Austin and the University of Southern California.

The scandal has not only tarnished the image of the schools but also exposed the weak spots in the admission process.

Authorities said they found instances of college entrance exam administrators being bribed to alter scores or grant students extra time on tests. The bribes were allegedly paid through Edge College & Career Network and an affiliated nonprofit, the Key Worldwide Foundation.

Routing the money through the nonprofit also provided the accused an opportunity of getting tax-deductible payments. Between 2011 and 2018, the parents had paid the firm about $25 million to bribe coaches and university administrators.

The criminal complaint names Harvard Business School MBAs Hodge, private equity player John B. Wilson and outsourcing executive Stephen Semprevivo, along with Stanford’s McGlashan and Robert Zangrillo.

The accused also includes Northwestern Kellogg MBA Augustin F. Huneeus, a Napa Valley vintner and co-founder of the Quintessa vineyard estate and University of Michigan MBA Todd Blake.

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Wilson, according to his LinkedIn profile, is the CEO of the consulting and private equity firm of Hyannis Port Capital. He graduated from Harvard in 1983 at the age of 23, the youngest in a class of 800.

He is accused of conspiring to not only bribe the USC water polo coach to get his son into that school but to also later use bribes to get his two daughters into Stanford and Harvard as recruited athletes. Wilson allegedly paid a total of $220,000 for the USC admission.

Zangrillo, who got his MBA in 1994, is the founder and CEO of a Miami-based firm that focuses on venture capital and real estate investments. He allegedly conspired with Singer to bribe athletics officials at USC to fraudulently designate his daughter as an athletic recruit. He also paid an employee of Singer to take classes on his daughter’s behalf. These bogus grades were submitted as part of her college application.

The scandal has not only tarnished the image of the schools but also exposed the weak spots in the admission process. Most of these schools are highly selective. The University of Texas at Austin grants admission to only four in 10 applicants and Yale just 7% in comparison to the average U.S. college that accepts two out of three applicants.

In some cases, payments that were effectively bribes to university officials were funnelled through charitable foundations to the universities, enabling the bribe givers to claim tax exemptions.

While the selective institutions justify selective admission claiming that they go by merit, Universities are tax-exempt and taxpayer-supported through federal aid. In the case of public institutions, they receive state funding.(Image Source:google.com)