On Tuesday, federal prosecutors brought charges against 50 people in a sweeping college cheating scandal in which wealthy parents paid roughly $25 million to help their children gain admission at exclusive colleges and universities including, Yale, Stanford, Georgetown, and USC.
At the center of the case is William Rick Singer from Newport Beach, California, the founder and owner of Edge College & Career Network — referred to as "The Key" — a for-profit college counseling organization. Singer also runs The Key Worldwide Foundation, a non-profit corporation that he established as a charity.
The Department of Justice has charged Singer with racketeering conspiracy, money laundering conspiracy and obstruction of justice, and alleges that his scheme included helping students cheat on SAT and ACT exams, bribing athletic coaches and administrators to pretend that students were athletic recruits, and using his charity to conceal the funds.
According to the Department of Justice, "Many clients then filed personal tax returns that falsely reported the payment to the KWF as charitable donations." The New York Times reported that the case is the Justice Department's largest ever education-related prosecution, and involved 200 agents and the arrest of 50 people in six states.
Andrew E. Lelling, the U.S. Attorney for the District of Massachusetts described the case at a press conference on Tuesday. "There will not be a separate admissions system for the wealthy," said Andrew E. Lelling, U.S. Attorney for the District of Massachusetts, at a press conference on Tuesday, "and there will not be a separate criminal justice system, either."
Here are the seven most shocking allegations that have emerged from the scandal:
1. Celebrities were among those charged
Actresses Lori Loughlin of "Full House" fame and Felicity Huffman were among those charged with participating in the scam.
Loughlin and her husband, fashion designer Mossimo Giannulli, allegedly paid $500,000 to manipulate documents to indicate that their daughters, Olivia Jade Giannulli, 19, and Isabella Rose Giannulli, 20, were recruited to row for USC's crew team, when neither were involved with the sport.
The indictment also states that federal agents recorded a conversation in which Huffman offered to pay $15,000 in order to help her older daughter, Sofia Grace Macy, 18, get a higher SAT score.
Huffman's husband, William H. Macy, who was not charged, has previously made statements expressing how "stressful" the college application process was for his daughter.
"She's going to go to college… We're right now in the thick of college application time, which is so stressful," Macy told Parade in January. "I am voting that once she gets accepted, she maybe takes a year off. God doesn't let you be 18 twice…But it's just my opinion, and we'll see what she wants to do, what Felicity thinks and how the chips fall."
2. Singer spoke openly about his scheme
Phone recordings of Singer's conversations are one of the most striking elements of the scandal.
According to the Department of Justice, Singer clearly laid out his plans, telling one parent, "We help the wealthiest families in the U.S. get their kids into school. There is a front door which means you get in on your own. The back door is through institutional advancement, which is 10 times as much money. And I've created this side door in."
3. Social media influencers were involved
Loughlin's daughter Olivia is a social media influencer whose YouTube channel, where she goes by "Olivia Jade," has almost 2 million subscribers (her sister Isabella is also an influencer, according to The New York Times).
In August, Olivia faced criticism after making flippant comments about her college plans.
"I don't know how much of school I'm gonna attend, but I'm gonna go in and talk to my deans and everyone and hope that I can try and balance it all," Olivia said in a YouTube video posted just before she moved in at USC. "I do want the experience of like game days, partying. I don't really care about school, as you guys all know."
She later apologized for her comments in another YouTube video in which she said, "I said something super ignorant and stupid, basically."
It wasn't the first time she had expressed ambivalence about education. "It's so hard to try in school when you don't care about anything you're learning," she tweeted in April 2017.
The New York Times has also reported on Giannulli's partnerships with brands like Amazon and Smile Direct Club, writing that, "in a paid post for Prime Student, Amazon's paid membership program for college students, Ms. Giannulli posed sitting on a bed, with the caption 'Officially a college student! It's been a few weeks since I moved into my dorm and I absolutely love it. I got everything I needed from Amazon with @primestudent and had it all shipped to me in just two-days.'"
After the indictment was released on Tuesday her Instagram account was flooded with negative comments related to the scandal.
4. Parents claimed students had learning disabilities, stand-ins took tests, proctors provided answers
According to The New York Times, Singer would find ways for students to receive extra time to take the SAT and ACT, including having parents provide documentation claiming their children had learning disabilities.
He also encouraged parents "to come up with a reason they would be in Houston or Hollywood, such as for a bar mitzvah or a wedding" so that students could take the exams at testing locations in Houston or West Hollywood that Singer claimed he "controlled."
Parents also allegedly paid anywhere from $15,000 to $75,000 to have Singer's company provide a stand-in to take standardized tests under students' names or to assign testing proctors who would provide the right answers or correct the exams after they were taken.
According to court documents Huffman expressed concerns that her daughter's school planned to provide its own proctor for her exams.
5. Athletic careers were fabricated and coaches were bribed
After students achieved the necessary test scores by the means described above, payments were made to university coaches under the guise of donations to the school, facilitated by The Key, and coaches would then select students as athletic recruits.
Students' applications included fake athletic achievements, like participation in school and club sports teams they did not belong to and accolades they had not earned. One student was accepted to Yale as a recruit for the women's soccer team after stating on her application that she was co-captain of a club team in California.
In one case, according to The New York Times, an edited image of a student was Photoshopped onto a picture of a water polo player. The student was described falsely as a varsity athlete and team MVP.
6. Seven CEOs were charged
Among those charged were at least seven current CEOs: Jane Buckingham, Robert Flaxman, Manuel Henriquez, Marci Palatella, Devin Sloane, John Wilson and Robert Zangrillo.
Douglas Hodge, former CEO of PIMCO, was also charged.
Hodge allegedly agreed to secure the admission of two of his children to USC as athletic recruits with a bribe, and tried to enlist the support of a cooperating witness to help a third child get into college too, according to court documents.
7. Some students were unaware of their parents' efforts
Gordon Caplan, co-chair of law firm Willkie Farr, was also charged in the cheating scandal according to the indictment. Caplan allegedly paid $75,000 to help his daughter get a better standardized test score, without her knowledge.
According to Above the Law, prosecutors have a recorded conversation between Caplan and a cooperating witness.
"She doesn't know. Nobody knows what happens. It happened, she feels great about herself. She got a test a score, and now you're actually capable for help getting into a school," the witness told Caplan, explaining that "she's going to take the test on her own, she's going to do her best, all that stuff and then we're going to do our magic on the back end."
Like this story? Subscribe to CNBC Make It on YouTube!
Don't miss:
