College admissions cheating scheme suspects include Mossimo founder, hedge fund execs

By Business LeadersFOXBusiness

Arrests made in largest college admissions scam ever prosecuted by the DOJ

Dozens of people involved with a nationwide college admissions scam have been arrested.

Several prominent CEOs and business leaders, as well as Hollywood actresses Lori Loughlin and Felicity Hoffman, were charged Tuesday with participating in a nationwide college admissions cheating scheme that involved bribery and entrance exam fraud. The alleged ringleader of the scheme pleaded guilty to various charges, including racketeering.

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Federal authorities charged nearly 50 people on various counts of bribery, fraud and conspiracy. The defendants are accused of bribing college coaches and administrators to doctor test results or falsely label students as athletes to boost their chances of gaining admission to top colleges, including Yale, the University of Southern California, Stanford, Georgetown and Wake Forest.

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"These parents are a catalog of wealth and privilege," U.S. Attorney Andrew Lelling said.

The Justice Department named William Singer, CEO of Key Worldwide Foundation and owner of the Edge College & Career Network as the scheme’s ringleader, alleging that he accepted bribes totaling $25 million. The list of charged individuals includes 33 parents and 13 college coaches. In some cases, Singer allegedly conspired with fellow defendants to represent the bribes as donations to Key Worldwide, a nonprofit organization.

BOSTON, MA - MARCH 12: William Rick Singer walks into the John Joseph Moakley United States Courthouse in Boston on March 12, 2019. Fifty people have been arrested nationwide in what authorities are calling the largest college admissions scam ever, i

The parents are accused of paying bribes of up to $6.5 million as part of the scheme. No students were charged in connection to the case.

FOX Business breaks down some of the business leaders ensnared in the college admissions bribery scheme below.

Gordon Caplan, 52,  Willkie Farr & Gallagher co-chairman

Caplan, who serves as co-chairman of the international law firm Willkie Farr & Gallagher, is accused of paying $75,000 masked as a charitable donation to Key Worldwide. In exchange, a proctor participating in the scheme agreed to alter Caplan’s daughter’s test results to ensure she received a high score on her ACT.

“It’s just, to be honest, I’m not worried about the moral issue here. I’m worried about the, if she’s caught doing that, you know, she’s finished,” Caplan said on a call with a witness in the case, according to federal documents.

Caplan was charged with conspiracy to commit mail fraud, among other counts. Willkie Farr & Gallagher did not immediately respond to a request for comment.

Mossimo Giannulli, 55, fashion designer and "Mossimo" founder

LOS ANGELES, CA - APRIL 18: Designer Mossimo Giannulli and actress Lori Loughlin attend LACMA's 50th Anniversary Gala sponsored by Christie's at LACMA on April 18, 2015 in Los Angeles, California. (Photo by Donato Sardella/Getty Images for LACMA)

Giannulli, the founder of the “Mossimo” fashion brand who is married to Loughlin, is accused along with his wife of paying $500,000 to have their daughters as potential recruits for USC’s crew team, even though neither plays the sport, in order to improve their chances of attending the school.

“I wanted to thank you again for 91 your great work with [our older daughter], she is very excited and both Lori and I are very appreciative of your efforts and end result!” Giannulli said in an email to a government witness.

Iconix Brand Group, which owns Mossimo, did not immediately respond to a request for comment.

Bill McGlashan, 55, TPG Growth Managing Partner

BEVERLY HILLS, CA - OCTOBER 03: Co-Founder and CEO of the Rise Fund and Co-Founder and Managing Partner of TPG Growth Bill McGlashan speaks onstage during Vanity Fair New Establishment Summit at Wallis Annenberg Center for the Performing Arts on Octo

McGlashan, who founded TPG Capital’s growth equity arm, allegedly conspired to falsify his son’s test results and athletic history so that he could gain entrance to USC. In one instance, McGlashan and a cooperating witness discussed the possibility of Photoshopping his son’s face onto an athlete’s body so that he could pose as a kicker or punter for USC’s football team.

“He does have really strong legs,” McGlashan joked in one conversation.

TPG placed McGlashan on indefinite leave in response to the allegations.

“As a result of the charges of personal misconduct against Bill McGlashan, we have placed Mr. McGlashan on indefinite administrative leave effective immediately. Jim Coulter, Co-CEO of TPG, will be interim managing partner of TPG Growth and The Rise Fund. Mr. Coulter will, in partnership with the organization’s executive team, lead all investment work for both going forward," the firm said.

Manuel Henriquez, 55, Hercules Capital CEO

Henriquez, who serves as CEO of Hercules Capital, is accused alongside his wife of participating in the admissions cheating scheme on “four separate occasions” for his two daughters. In addition to paying for falsified test results, the Henriquezes reportedly bribed Georgetown’s head tennis coach, Gordon Ernst, in order to represent their daughter as a college tennis recruit.

Hercules Capital did not immediately respond to a request for comment. The publicly traded company’s shares fell more than 9 percent on the news.

Douglas Hodge, 61, former Pimco CEO

Hodge served as CEO at Pimco, an asset management firm, from 2014 to 2016. He is accused of using bribes and falsified athletic histories to gain college entry for three of his kids to USC and Georgetown. In one instance, a Georgetown application created for Hodge’s daughter falsely claimed that she had won multiple United States Tennis Association tournaments. He is accused of paying bribes totaling hundreds of thousands of dollars.

Hodge denied a request for comment when reached by Bloomberg.

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Robert Zangrillo, 52, Dragon Global CEO

A prominent investment firm executive and real estate developer in Miami, Zangrillo is accused of bribing USC officials to represent his daughter as an athletic recruit. He also allegedly paid $200,000 to Key Worldwide in exchange for doctored test results.

Dragon Global could not immediately be reached for comment.

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