- Thursday, March 28, 2019
The massive criminal indictment by the U.S. Department of Justice (DOJ) concerning college admissions fraud holds many crucial lessons for higher education leaders. From my perspective as a former prosecutor, I found some of the most important takeaways to be hidden within the hundreds of pages of materials released by the U.S. Attorney’s Office.
Basic Facts About the Case
On Monday, March 11, 2019, more than 30 people were indicted in connection with a widespread college admissions scandal. A stunning 200+ page affidavit of probable cause supported the indictment, describing in detail an overarching conspiracy to: (1) bribe college entrance exam administrators; (2) bribe coaches and officials at elite universities to designate student candidates as recruited athletes; and (3) funnel payoff money through nonprofit corporations.
College officials may want to read through the DOJ documents in this case, as the details shed light on conduct that should raise red flags for all universities going forward. See – https://www.justice.gov/usao-ma/pr/arrests-made-nationwide-college-admissions-scam-alleged-exam-cheating-athletic
Three general approaches were used to effectuate the entrance exam conspiracy. In one approach an alleged co-conspirator posed as students and took exams for them. Many of the students also took the same exam and were unaware that someone else was simultaneously completing the test in their name. Another approach involved providing students with the answers to exam questions. Finally, there were instances where the proctor corrected the student’s answers after the student turned in the exam. Use of designated test sites, a gifted test taker, and proctors all linked to the conspiracy enabled the ACT and SAT exam fraud to occur.
The other conspiracy involved the false designation of student applicants as recruited athletes. This conspiracy garnered the highest value of bribe payments and involved university coaches and administrators. For a hefty price, a coach would designate the identified student as an athlete of a particular sport, even if they did not play the sport or were not qualified to play at the collegiate level. This allowed the student to receive early admission and admission where their grades may not have been strong enough to otherwise earn acceptance to the university. Most students were unaware that a fictitious athlete profile had been created in their name and used to ensure their admission. Once at the university, the students were removed from team rosters.
Crucial Facts Buried in the DOJ Documents
From the viewpoint of a former prosecutor, the criminal affidavit contains a treasure trove of critical information. It describes in detail the overt acts undertaken by the individuals named in the indictment, including whether the alleged fraud involved exam results or athletic designation, the timing, amount, and nature of bribe payments, and ultimately the university activities involved. The affidavit also includes transcriptions of audio recordings intercepted by the FBI.
Higher education leaders may want to pay careful attention to the following facts about this case that have not yet received adequate public attention:
College officials may want to prioritize compliance actions and internal investigations to ensure they are not surprised as this case spreads over time.
Universities should check to ensure their whistleblower processes are understood by all and work effectively to spot problems early on before they expand.
Potential Ongoing Legal Implications
Perhaps the most significant takeaway from the affidavit is that the DOJ investigation has probably not concluded. The indicted 32 parents represent a small fraction of those who may have participated in the conspiracy over the years. In addition to hundreds of additional families, it is likely that other universities, coaches, and administrators were involved in similar schemes. With heightened public awareness about the investigation and the potential for cooperation by individuals now under indictment, new charges may follow.
A possible area for additional criminal investigation and charges may involve the conspiracy related to the funneling of payments through nonprofit organizations identified by Singer. If true, the fraudulent payments made to the nonprofits should not have been treated as tax exempt charitable contributions. Accordingly, the IRS may very well pursue a parallel investigation involving tax fraud or tax evasion.
Next Steps for Universities, High School and Collegiate Admissions Offices, and Entrance Exam Administrators Universities, high school and collegiate admissions offices, and entrance exam administrators would do well to get ahead of any potential additional indictments or parallel criminal investigations.
Universities, high school and collegiate admissions offices, and entrance exam administrators would do well to get ahead of any potential additional indictments or parallel criminal investigations.
Even if you are confident that your organization is free of similar problems, this case presents a good opportunity to update relevant compliance systems, perform training, and review data to spot potentially weak operational areas.
Proactive organizations may want to consider taking the following actions:
It’s never fun to look under rocks. But scandals like Operation Varsity Blues can also be a gift to college officials, giving them leverage and raising the urgency of the practical steps needed to protect against misconduct. This can be an important opportunity to set in motion the actions described above, among other needed next steps. Bringing in outside experts and investigators can also be useful to provide credibility and a neutral perspective.
This summary of legal issues is published for informational purposes only. It does not dispense legal advice or create an attorneyclient relationship with those who read it. Readers should obtain professional legal advice before taking any legal action.
For more information about Schnader’s Internal Investigations, Ethics and Compliance Practice Group or to speak with a member of the firm, please contact: