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Class-action lawsuit filed against 8 colleges in admissions bribery scandal that nabbed business CEOs and Felicity Huffman

Key Points
  • A class-action civil lawsuit has been filed against eight universities in connection with the massive college admissions bribery scandal.
  • Defendants in the lawsuit are Yale University, the University of Southern California, Stanford University, UCLA, the University of San Diego, the University of Texas, Wake Forest University and Georgetown University. Federal prosecutors have said the schools were victims of the scam.
  • Federal criminal charges related to the scandal were filed Tuesday against TV stars Felicity Huffman and Lori Loughlin, as well as top business and legal executives, such as Manuel Henriquez, formerly of Hercules Capital, and former Pacific Investment Management Co. CEO Douglas Hodge.
This combination of pictures created on March 12, 2019 shows US actress Felicity Huffman(L) attending the Showtime Emmy Eve Nominees Celebration in Los Angeles on September 16, 2018 and actress Lori Loughlin arriving at the People's Choice Awards 2017 at Microsoft Theater in Los Angeles, California, on January 18, 2017.
Lisa O'Connor | AFP | Getty Images

A class-action civil lawsuit has been filed by seven college students against eight top universities in connection with the massive college admissions bribery scandal that has already led to federal criminal charges earlier this week against TV stars Felicity Huffman and Lori Loughlin, as well as against top business and legal executives.

The amended suit filed Thursday in U.S. District Court for the Northern District of California by the students accuses each of the universities of being "negligent in failing to maintain adequate protocols and security measures in place to guarantee the sanctity of the college admissions process."

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And the suit, which claims more than $5 million in damages, says that as a result of the scheme "unqualified students found their way into the admissions rolls of highly selective universities, while those students who played by the rules and did not have college-bribing parents were denied admission."

The suit is seeking repayment of the application fees the students paid to the universities.

The original suit in the case, which was filed Wednesday, named two Stanford University students, Kalea Woods and Erica Olsen, as plaintiffs. On Thursday, Olsen dropped out of the case, but six other students joined it with Woods in the amended complaint: Keri Fidelak and her mother, Lauren Fidelak; Orange County, California, community college student Tyler Bendi, James Johnson and Nicholas James Johnson.

Although there are currently seven named plaintiffs in the suit, the action would ultimately include potentially thousands of students as plaintiffs, if not more, if the case is granted class-action status by a judge.

Defendants in the lawsuit are Yale University, the University of Southern California, Stanford University, UCLA, the University of San Diego, the University of Texas, Wake Forest University and Georgetown University. Federal prosecutors have said the schools were victims of the scam.

William "Rick" Singer leaves the federal courthouse after facing charges in a nationwide college admissions cheating scheme in Boston, Massachusetts, U.S., March 12, 2019.
Bryan Snyder | Reuters

Also named as defendants are William "Rick" Singer and his college preparatory business, the Edge College & Career Network. Singer has pleaded guilty to masterminding the scheme to help children of wealthy people get into universities through a combination of bribing college athletic coaches, having other people take admission tests for the applicants and hiring people to correct students' incorrect answers on those tests.

In a statement released after it filed the suit on behalf of the students, the Minneapolis-based law firm Zimmerman Reed said, "The students who filed the complaint didn't receive what they paid for — to participate in an application process free of fraud."

"According to the complaint, these schools represented that their admission process would be based on the applicants' merits, considering their character and performance," the firm said. "Instead, the students allege that what they got was a process tainted by bribes and school officials who failed to assure an honest application process."

"It's a straightforward claim and a simple remedy. The students want their money back. They request that anyone who paid an application fee to any of the eight named universities but was denied admission gets their application fee returned."

The suit claims that the universities named as defendants "knew or should have known of these corrupt practices because the funds" that were being used as bribes to gain admittance for the children of wealthy parents "were often going into University accounts, and to prominent University figures such as coaches and directors in charge of University accounts."

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Here are the prominent business people implicated in the college admission scheme

The suit said that Woods, at the time she applied to USC for admission, "was never informed that the process of admission at USC was an unfair, rigged process, in which parents could buy their way into the university through bribery and dishonest schemes."

"Had she known that the system at USC was warped and rigged by fraud, she would not have spent the money to apply to the school. She also did not receive what she paid for — a fair admissions consideration process," the lawsuit says, noting that Woods had paid $85 for her application to USC.

Wake Forest's president, Nathan Hatch, in a letter to parents that was obtained by NBC News, wrote: "I am writing today to address some of the most frequent questions I have received and to make abundantly clear that Wake Forest is considered by the U.S. Department of Justice to be a victim of this fraud."

Hatch added, "In no way has it been suggested that the University was involved in the deceitful practices, nor were any employees, other than [Wake Forest volleyball coach Bill] Ferguson, accused of wrongdoing." Ferguson has reportedly been placed on administrative leave.

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A spokesman for the University of Texas said, "Like many students and families across the country, we are also outraged that parents, outside actors and university employees may have committed fraud surrounding admissions at universities."

"The University of Texas has a thorough, holistic admissions process. The actions alleged by federal prosecutors against one UT employee were not in line with that policy and may have been criminal," the spokesman said. "They do not reflect our admissions process."

Stanford University spokesman E.J. Miranda said, "The suit is under review."

Lawyers for Olsen and Woods, as well as spokesmen for the six other universities, did not immediately respond to requests for comment.

The lawsuit follows intensive media coverage of the criminal charges against "Desperate Housewives" star Huffman and "Full House" actress Loughlin, as well as against the other well-heeled defendants.

Huffman, according to federal authorities, "made a purported charitable contribution of $15,000 ... to participate in the college entrance exam cheating scheme on behalf of her eldest daughter. "

She was also accused of paying someone to proctor her daughter's SAT and correct wrong answers.

Loughlin, who was released on $1 million bail on Wednesday, is accused with her husband, fashion designer Mossimo Giannulli, of paying a total of $500,000 in bribes to get their two daughters admitted to USC.

US Attorney Andrew E. Lelling, center, holds a press conference at the John Joseph Moakley United States Courthouse in Boston on March 12, 2019.
Craig F. Walker | Boston Globe | Getty Images

The daughters were given preferred status for admissions purposes because they supposedly were rowing recruits. Neither of them rows.

Manuel Henriquez of Hercules Capital on Wednesday voluntarily stepped aside as chairman and CEO, effective immediately, in the wake of charges he participated in the $25 million college admissions cheating scheme. Federal investigators dubbed their probe Operation Varsity Blues.

Also charged in the alleged scam is former Pacific Investment Management Co. CEO Douglas Hodge, William McGlashan Jr., a senior executive at TPG Capital; Gordon Caplan, co-chairman of international law firm Willkie Farr; and Agustin Huneeus, head of the Huneeus vineyard in Napa Valley. McGlashan and Caplan were both placed on indefinite leave by their firms.

Prosecutors allege that Hodge paid hundreds of thousands of dollars in bribes for his daughters' admission to USC.