AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT
I, Laura Smith, being duly sworn, state as follows:
INTRODUCTION AND AGENT BACKGROUND
1. I am a Special Agent with the Federal Bureau of Investigation (“FBI”) assigned to the Boston, Massachusetts Field Office. I joined the FBI in 2010 as a forensic accountant conducting complex financial investigations. I am currently a special agent on a squad that investigates economic crimes, including various forms of corporate fraud, securities fraud and bribery. I hold a Bachelor’s degree in Criminal Justice-Economic Crimes Investigation and a Master’s degree in Accounting. As an FBI Special Agent, I am an investigative or law enforcement officer of the United States within the meaning of Title 18, United States Code, Section 2510(7), in that I am empowered by law to conduct investigations of, and to make arrests for, offenses enumerated in Title 18, United States Code, Section 2516.
2. I make this affidavit in support of criminal complaints charging the following individuals (collectively, “the defendants”) with conspiracy to commit mail fraud and honest services mail fraud, in violation of Title 18, United States Code, Section 1349:
GREGORY ABBOTT 36
MARCIA ABBOTT 36
GAMAL ABDELAZIZ 83
DIANE BLAKE 169
TODD BLAKE 169
JANE BUCKINGHAM 15
GORDON CAPLAN 22
I-HSIN “JOEY” CHEN 42
AMY COLBURN 193
GREGORY COLBURN 193
ROBERT FLAXMAN 196
MOSSIMO GIANNULLI 88
ELIZABETH HENRIQUEZ 44
MANUEL HENRIQUEZ 44
DOUGLAS HODGE 162
FELICITY HUFFMAN 72
AGUSTIN HUNEEUS, Jr. 96
BRUCE ISACKSON 107
DAVINA ISACKSON 107
MICHELLE JANAVS 153
ELISABETH KIMMEL 143
MARJORIE KLAPPER 79
LORI LOUGHLIN 88
TOBY MACFARLANE 180
WILLIAM E. McGLASHAN, Jr. 58
MARCI PALATELLA 137
PETER JAN SARTORIO 177
STEPHEN SEMPREVIVO 186
DEVIN SLOANE 129
JOHN B. WILSON 122
HOMAYOUN ZADEH 199
ROBERT ZANGRILLO 118
3. Specifically, as set forth below, I have probable cause to believe that the defendants conspired with others known and unknown: (1) to bribe college entrance exam administrators to facilitate cheating on college entrance exams; (2) to bribe varsity coaches and administrators at elite universities to designate certain applicants as recruited athletes or as other favored candidates, thereby facilitating the applicants’ admission to those universities; and (3) to use the facade of a charitable organization to conceal the nature and source of the bribe payments.
4. The facts set forth in this affidavit come from my personal involvement with this investigation, interviews with witnesses, including the cooperating witnesses described below, and my review of documents—including bank records, flight records, e-mails, telephone toll records, cell site data and other materials obtained through grand jury subpoenas and search warrants—as well as Court-authorized Title III wiretap recordings, consensual recordings made by a cooperating witness, and information provided by other law enforcement agents.
5. In submitting this affidavit, I have not included each and every fact known to me about this investigation. Rather, I have included only those facts that I believe are sufficient to establish probable cause.
Overview of the Conspiracy
6. Beginning in or about 2011, and continuing through the present, the defendants— principally individuals whose high-school aged children were applying to college—conspired with others to use bribery and other forms of fraud to facilitate their children’s admission to colleges and universities in the District of Massachusetts and elsewhere, including Yale University, Stanford University, the University of Texas, the University of Southern California, and the University of California – Los Angeles, among others. Evidence I have reviewed shows that the scheme included the following:
a. Bribing college entrance exam administrators to allow a third party to facilitate cheating on college entrance exams, in some cases by posing as the actual students, and in others by providing students with answers during the exams or by correcting their answers after they had completed the exams;
b. Bribing university athletic coaches and administrators to designate applicants as purported athletic recruits—regardless of their athletic abilities, and in some cases, even though they did not play the sport they were purportedly recruited to play—thereby facilitating their admission to universities in place of more qualified applicants;
c. Having a third party take classes in place of the actual students, with the understanding that grades earned in those classes would be submitted as part of the students’ college applications;
d. Submitting falsified applications for admission to universities in the District of Massachusetts and elsewhere that, among other things, included the fraudulently obtained exam scores and class grades, and often listed fake awards and athletic activities; and
e. Disguising the nature and source of the bribe payments by funneling the money through the accounts of a purported charity, from which many of the bribes were then paid.
e. Disguising the nature and source of the bribe payments by funneling the money through the accounts of a purported charity, from which many of the bribes were then paid.
Certain Relevant Persons and Entities
7. The Edge College & Career Network, LLC, also known as “The Key,” is a for-profit college counseling and preparation business based in Newport Beach, California that was established in or about 2007 and registered in California in or about 2012.
8. The Key Worldwide Foundation (“KWF”) is a non-profit corporation founded in or about 2012 and based in Newport Beach, California. In or about 2013, the Internal Revenue Service (“IRS”) approved KWF as an exempt organization under Section 501(c)(3) of the Internal Revenue Code, meaning that KWF is exempt from paying federal income tax, and that individuals who contribute to KWF may deduct those contributions from their taxable income, subject to certain limitations.
9. ACT, Inc. is a non-profit organization headquartered in Iowa City, Iowa that administers the ACT exam, a standardized test that is widely used as part of the college admissions process in the United States. The ACT includes sections on English, mathematics, reading and science and is graded on a scale of 1 to 36.
10. The College Board is a non-profit organization headquartered in New York, New York. Together with Educational Testing Service (“ETS”), a non-profit organization headquartered in Lawrence Township, New Jersey, the College Board develops and administers the SAT, a standardized test that, like the ACT exam, is widely used as part of the college admissions process in the United States. Between 2005 and January 2016 the SAT was graded on a scale of 600 to 2400. As of March 2016, the SAT has been scored on a scale of 400 to 1600. The College Board and ETS also develop and administer SAT subject tests, which are also used as part of the college admissions process.
11. Georgetown University (“Georgetown”) is a highly selective private university located in Washington, D.C.
12. Stanford University (“Stanford”) is a highly selective private university located in Palo Alto, California.
13. The University of California at Los Angeles (“UCLA”) is a highly selective public university located in Los Angeles, California.
14. The University of San Diego (“USD”) is a selective private university located in San Diego, California.
15. The University of Southern California (“USC”) is a highly selective private university located in Los Angeles, California.
16. The University of Texas at Austin (“U-Texas”) is a highly selective public university located in Austin, Texas.
17. Wake Forest University (“Wake Forest”) is a highly selective private university located in Winston-Salem, North Carolina.
18. Yale University (“Yale”) is a highly selective private university located in New Haven, Connecticut.
19. The athletic teams of Georgetown, Stanford, UCLA, USD, USC, U-Texas, Wake Forest and Yale (collectively, “the Universities”) compete in most sports at the Division I level, the highest level of intercollegiate athletics sanctioned by the National Collegiate Athletic Association (“NCAA”).
20. Cooperating Witness 1 (“CW-1”) is an individual who participated in the scheme. CW-1 founded and, together with others, operated The Key and KWF.
21. Cooperating Witness 2 (“CW-2”) is an individual who participated in the scheme. CW-2 was employed at relevant times as the director of college entrance exam preparation at a private college preparatory school and sports academy in Bradenton, Florida.
CW-1 has agreed to plead guilty in the United States District Court for the District of Massachusetts to racketeering conspiracy, in violation of Title 18, United States Code, Section 1962(d); money laundering conspiracy, in violation of Title 18, United States Code, Section 1956(h); conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371; and obstruction of justice, in violation of Title 18, United States Code, Section 1512(c). CW-1 has been cooperating with the government’s investigation since in or about late September 2018, in the hope of obtaining leniency when he is sentenced. In or about October 2018, after he began cooperating with the government, CW-1 alerted several subjects of the investigation to its existence, resulting in the obstruction of justice charge to which he has agreed to plead guilty. Information provided by CW-1 has been corroborated by, among other things, Court-authorized wiretaps, e-mails, documents, consensual recordings, and interviews of other witnesses, including cooperating witnesses.
CW-2 has agreed to plead guilty in the United States District Court for the District of Massachusetts to conspiracy to commit mail fraud and honest services mail fraud, in violation of Title 18, United States Code, Section 1349; and conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). CW-2 has been cooperating with the government’s investigation since in or about February 2019, in the hope of obtaining leniency when he is sentenced. Information provided by CW-2 has been corroborated by, among other
22. Cooperating Witness 3 (“CW-3”) is an individual who participated in the scheme. CW-3 was employed at relevant times as the head coach of women’s soccer at Yale.
General Background on Standardized Testing and the College Admissions Process
23. The ACT and the SAT are typically administered to large groups of students on specified dates and under strict time limits. However, students with certain learning or other disabilities may qualify for extended time. In such circumstances, students take the test alone, under the supervision of a test administrator retained by ACT, Inc. or the College Board.
24. Prior to administering the ACT, test administrators must typically certify that they will administer the exam in accordance with the ACT Administration Manual, and will ensure that the “test materials are kept secure and confidential, used for this examinee only, and returned to ACT immediately after testing.” Similarly, prior to administering the SAT exam, test administrators must typically certify that they will administer the test in accordance with the SAT coordinator’s manual, that the SAT is the property of the College Board, and that no one other than the student can “open the test book and see the test content.”
25. The ACT and SAT exams, and the scores students earn on those exams, are the intellectual and physical property of ACT, Inc. and the College Board, respectively. things, Court-authorized wiretaps, e-mails, documents, consensual recordings, and interviews of other witnesses, including cooperating witnesses.
CW-3 has agreed to plead guilty in the United States District Court for the District of Massachusetts to wire fraud, in violation of Title 18, United States Code, Section 1343; honest services wire fraud, in violation of Title 18, United States Code, Sections 1343 and 1346; and conspiracy to commit the same, in violation of Title 18, United States Code, Section 1349. CW- 3 has been cooperating with the government’s investigation since in or about April 2018, in the hope of obtaining leniency when he is sentenced. Information provided by CW-3 has been corroborated by, among other things, Court-authorized wiretaps, e-mails, documents, consensual recordings, and interviews of other witnesses, including cooperating witnesses.
26. Most of the Universities require prospective students to submit standardized test scores—typically, either the ACT or the SAT—as part of their application packages. When submitted, standardized test scores are a material part of the admissions process at each of the Universities.
27. All of the Universities also recruit students with demonstrated athletic abilities, and typically apply different criteria when evaluating applications from such students, with the expectation that recruited athletes will be contributing members of the Universities’ athletic teams once enrolled. Typically, the admissions offices at the Universities allot a set number of admission slots to each head coach of a varsity sport for that coach’s recruited athletes. At each of the Universities, the admissions prospects of recruited athletes are higher—and in some cases substantially higher—than those of non-recruited athletes with similar grades and standardized test scores.
28. Student athletes recruited by coaches at USC and UCLA, for example, are typically considered by designated admissions committees, which give consideration to their athletic abilities, and may admit applicants whose grades and standardized test scores are below those of other USC or UCLA students, including non-recruited athletes. At Wake Forest, as another example, approximately 128 admissions slots are designated for athletic recruitment, and recruited students are typically assured of admission to the university provided they meet certain \minimum academic standards. Similarly, at Georgetown, approximately 158 admissions slots are allocated to athletic coaches, and students recruited for those slots have substantially higher admissions prospects than non-recruited students.
29. At each of the Universities, admissions slots, the determination of which students to admit, and the resulting composition of undergraduate classes are important assets of the University.
The College Entrance Exam Cheating Scheme
30. The college entrance exam cheating scheme generally worked as follows:
a. CW-1 instructed clients of The Key to seek extended time for their children on college entrance exams if they had not done so already, including by having the children purport to have learning disabilities in order to obtain the medical documentation that ACT, Inc. and the College Board typically require before granting students extended time.
b. Once the students were granted extended time—which generally allowed them to take an exam over two days instead of one, and in an individualized setting—CW-1 instructed his clients to change the location of the exam to one of two test centers he told them he “controlled”: a public high school in Houston, Texas (the “Houston Test Center”) or a private college preparatory school in West Hollywood, California (the “West Hollywood Test Center”). For example, in explaining the scheme to defendant WILLIAM E. McGLASHAN, Jr., CW-1 explained that he needed to “control the center” for the scheme to work, and that by obtaining “extended time” for the test, McGLASHAN’s son would be able to take the test at CW-1’s “facility,” rather than at his own high school. At those test centers, CW-1 had established relationships with test administrators who had agreed to accept bribes to facilitate the cheating scheme: Niki Williams at the Houston Test Center, and Igor Dvorskiy at the West Hollywood Test Center. CW-1 typically instructed his clients to fabricate a reason—such as a bar mitzvah
Williams and Dvorskiy have been indicted by a federal grand jury in the District of Massachusetts on a charge of racketeering conspiracy, in violation of Title 18, United States Code, Section 1962(d). or a wedding—that their children purportedly needed to take the test in Houston or West Hollywood instead of at their own schools.
c. After the location of the exam had been changed, ACT, Inc. and the College Board sent the exams to those test centers, typically via private interstate commercial carrier, such as Federal Express (“FedEx”) in the case of ACT, Inc., and United Parcel Service (“UPS”) in the case of the College Board.
d. CW-1 bribed the test administrators to allow a third-party—typically CW- 2—to take the exams in place of the actual students, to serve as a purported proctor for the exams while providing students with the correct answers, or to review and correct the students’ answers after they completed the exams. In many instances, the students taking the exams were unaware that their parents had arranged for this cheating.
e. The corrupt test administrators sent the doctored exams back to ACT, Inc. and the College Board, typically via either UPS or FedEx.
f. CW-1’s clients paid CW-1 between $15,000 and $75,000 per test to participate in the cheating scheme, with the payments typically structured as purported donations to the KWF charity.
g. CW-1, in turn, paid Dvorskiy bribes of approximately $10,000 per test to permit the cheating. CW-1 likewise bribed Williams, typically via payments through a mutual acquaintance, Martin Fox, who introduced CW-1 to Williams. However, in July 2018, CW-1 sent Williams a $5,000 check directly. CW-1 also paid CW-2 approximately $10,000 to take or
Fox has been indicted by a federal grand jury in the District of Massachusetts on a charge of racketeering conspiracy, in violation of Title 18, United States Code, Section 1962(d). correct each student’s test. Most of the payments to Dvorskiy and CW-2 were drawn on the account of the KWF charity.
h. In explaining the scheme to clients, CW-1 typically sought to earn their trust and confidence by noting that he had previously done the same thing many times before with other families. As set forth below, for example, CW-1 had the following exchange with defendant GORDON CAPLAN in a call on or about June 15, 2018 (prior to the time CW-1 began cooperating with the government’s investigation), that was intercepted pursuant to a Court-authorized wiretap:
CAPLAN And it works?
CW-1 Every time. (laughing)
CW-1 I mean, I’m sure I did 30 of them at different, you know, dates because there’s different dates, and they’re all families like yours, and they’re all kids that wouldn’t have perform[ed] as well, and then they did really well, and it was like, the kids thought, and it was so funny ’cause the kids will call me and say, “Maybe I should do that again. I did pretty well and if I took it again, I’ll do better even.” Right? And they just have no idea that they didn’t even get the score that they thought they got.
Indeed, in many cases, CW-1’s clients referred other parents to him, or inquired directly about other parents’ involvement in the scheme. For example, as set forth in greater detail below, defendant AGUSTIN HUNEEUS, Jr., told CW-1, in substance, that he was aware that McGLASHAN had participated in the college entrance exam scheme, but that McGLASHAN had not advised his own son of that fact, and that McGLASHAN’s son thus “had no idea ... that you helped him on the ACT.”
6 Excerpts of wiretap interceptions and consensual recordings set forth herein are based on draft transcripts of those recordings.
i. The children of CW-1’s clients submitted the fraudulently obtained exam scores as part of their applications to universities nationwide, including Boston College, Boston University and Northeastern University in the District of Massachusetts.
The College Recruitment Scheme
31. Between approximately 2011 and 2018, parents paid CW-1 approximately $25 million to bribe coaches and university administrators to designate their children as purported recruited athletes, or as members of other favored admissions categories, thereby facilitating the children’s admission to those universities. The recruitment scheme typically worked as follows:
a. CW-1 told parents, in sum and in substance, that he could facilitate their children’s admission to certain universities via what he termed the “side door.” He described the side door scheme as a quid pro quo, pursuant to which the parents would purport to make charitable donations to KWF. CW-1, in turn, would funnel those payments to particular athletic coaches, or to university programs designated by those coaches, using KWF to disguise the nature and source of the payments. CW-1 typically explained to parents that, in exchange for the payments, the coaches would designate their children as recruited athletes—regardless of their athletic abilities—thereby facilitating their admission to the universities.
b. CW-1 typically explained to his clients, in substance, that the scheme was a tried-and-true method of gaining admission to colleges, and that many other families were participating or had already participated in it, leveraging connections CW-1 had developed at multiple universities over years of work with prior clients. For example, set forth below is how
In addition, as set forth herein, e-mails, wire transfers and mailings in furtherance of the conspiracy were sent to and from the District of Massachusetts, telephone calls in furtherance of the conspiracy were also made to and from the District of Massachusetts, and two of the conspirators have residences in the District of Massachusetts. CW-1 described the scheme to CAPLAN in the June 15, 2018 call, during which CW-1 represented to CAPLAN that he had successfully engaged in the same scheme with nearly 800 other families:
Okay, so, who we are-- what we do is we help the wealthiest families in the U.S. get their kids into school .... Every year there are-- is a group of families, especially where I am right now in the Bay Area, Palo Alto, I just flew in. That they want guarantees, they want this thing done. They don’t want to be messing around with this thing. And so they want in at certain schools. So I did 761 what I would call, “side doors.” There is a front door which means you get in on your own. The back door is through institutional advancement, which is ten times as much money. And I’ve created this side door in. Because the back door, when you go through institutional advancement, as you know, everybody’s got a friend of a friend, who knows somebody who knows somebody but there’s no guarantee, they’re just gonna give you a second look. My families want a guarantee. So, if you said to me ‘here’s our grades, here’s our scores, here’s our ability, and we want to go to X school’ and you give me one or two schools, and then I’ll go after those schools and try to get a guarantee done. So that, by the time, the summer of her senior year, before her senior year, hopefully we can have this thing done, so that in the fall, before December 15th, you already know she’s in. Done. And you make a financial commitment. It depends on what school you want, may determine how much that actually is. But that’s kind of how the the side and back door work.
c. Once parents agreed to participate in the scheme, CW-1 sent bribes to coaches and, in one case, a university administrator, typically out of a KWF bank account. In some instances, he directed the money to the recipients directly, for their personal use, including one recipient who received bribe payments by mail at his residence in the District of Massachusetts. In other instances, he directed the money to designated accounts at the Universities that were controlled by the recipients, including in some instances via mailings from the District of Massachusetts. In still other instances, CW-1’s clients made the payments directly to the designated accounts at the Universities, as directed by the bribe recipients.
d. In recruiting coaches to participate in the scheme, CW-1 sought to earn their trust and confidence by making clear to them, as he did to his clients, that other coaches were already engaged in the same conduct with him. For example, set forth below are two excerpts from a call on or about May 4, 2018, in which CW-1 sought to enlist the assistance of CW-3 in recruiting additional coaches to join the conspiracy:
CW-1 You can say he’s doing it at, for this year I did [seven elite schools], we’ve done it everywhere.
CW-3 Okay, see that might, yeah it definitely would make them feel more comfortable with all those places.
CW-3 Okay, alright, and all those schools, like, you-- you’re-- you’re comfortable. I can-- I can tell her comfortably that you worked with all those schools.
CW-1 It’s all different-- it’s all—absolutely, but it’s all-- it’s different programs at every school.
CW-3 Right, right, right, I know, I know. But saying that you worked with those schools I think that makes her feel more comfortable, knowing that you’ve worked with all the schools before.
CW-1 You can tell them I did 760 of these this year, 96 the year before.
e. In exchange for the bribes, the recipients designated the children of CW- 1’s clients as purported athletic recruits—without regard for their athletic abilities—or as members of other favored admissions categories, such as “VIP lists,” thereby facilitating their admission to the Universities.
f. As part of the scheme, CW-1, together with others, also fabricated athletic “profiles” for students, which CW-1 submitted to the Universities in support of the students’ applications, and which contained falsified athletic credentials—including fake honors the students had purportedly received and elite athletic teams they had purportedly played on. In some instances, parents assisted CW-1 in creating the fabricated profiles, including by supplying staged photographs of their children engaged in athletic activity. In other instances, CW-1 and his associates simply found photos of athletes on the Internet and either used those photos or used software such as Photoshop to insert the applicants’ faces onto the bodies of legitimate athletes. For example, as set forth in greater detail below, CW-1 explained to McGLASHAN that he would create a falsified athletic profile for McGLASHAN’s son, something he told McGLASHAN he had “already done ... a million times,” and which would involve him using “Photoshop and stuff” to deceive university admissions officers.
g. As another example, on or about November 13, 2017, CW-1 sent a falsified athletic profile to CW-3. The profile falsely described an applicant as the co-captain of a prominent club soccer team in southern California. CW-3, in exchange for a promised bribe payment, designated the applicant as a recruit for the Yale women’s soccer team, despite the fact that, as he knew at the time, she did not play competitive soccer. On or about January 1, 2018— after the applicant was admitted to Yale—CW-1 mailed CW-3 a check in the amount of $400,000, drawn on a KWF bank account. Relatives of the applicant subsequently paid CW-1 approximately $1.2 million in multiple installments, including approximately $900,000 that was directed to KWF as a purported charitable donation.