Federal officials charged nearly three-dozen parents, including actresses Felicity Huffman and Lori Loughlin as well as many business figures, in an alleged multimillion-dollar scheme to fabricate academic and athletic credentials with the aim of getting their children into top-tier universities. Several entrepreneurs were among those charged, including multiple food and beverage company founders, a founder of a boutique marketing firm, and Loughlin's husband, Mossimo Giannulli, the entrepreneur behind the American fashion company Mossimo. 

"These parents are a catalog of wealth and privilege," said U.S. Attorney for the District of Massachusetts Andrew Lelling at a press conference Tuesday. "They include, for example, CEOs of private and public companies, successful securities and real estate investors, two well-known actresses, a famous fashion designer, and the co-chairman of a global law firm."

Prosecutors said in the scheme, parents paid enormous sums to a nonprofit firm run by William Rick Singer in exchange for his enlisting a third party to proctor and, at times, take, SAT and ACT tests for their kids to boost their scores and ease admission into elite universities. In other instances, Singer is accused of facilitating bribes to athletic coaches at colleges such as Yale, UCLA, and Stanford. In many cases, Lelling said, parents paid Singer between $250,000 and $450,000 per student.

One entrepreneur named in the FBI affidavit accompanying the charges is Jane Buckingham, the chief executive of boutique marketing firm Trendera in Los Angeles. She is accused of making a purported "charitable donation" of $50,000 in exchange for having another individual take the ACT on behalf of her son. The individual was the director of college entrance exam preparation, and is named in the indictment as a cooperating witness in the Justice Department's investigation.

Buckingham at one point joked with the firm arranging the testing, in a line that reveals the cavalier nature of using large sums of money to cheat a system, an agent attests. "Yeah. I know this is craziness. I know it is. And then I need you to get him into USC, and then I need you to cure cancer and [make peace] in the Middle East," Buckingham said, according to a recorded conversation quoted in the FBI affidavit.

Buckingham's son received a score of 35 out of a possible 36 on the ACT exam that another individual "secretly took on his behalf," the affidavit states.

Peter Jan (P.J.) Sartorio of Menlo Park, California, founded a specialty food company in the Bay Area in 1999. It made refrigerated vegetarian products, such as hummus and polenta, and bridged into frozen specialty foods as the market for natural and organic food swelled through the early 2000s. (The company, based in South San Francisco, later would be called Elena's Food Specialties, and makes products sold under labels Nate's and PJ's.)

In 2017, he paid $15,000 in cash for his daughter to take the ACT exam outside of her high school, in a West Hollywood facility, with another individual proctoring and correcting her answers, the indictment alleges.

Another entrepreneur, this one based on the East Coast, Gregory Abbott, is the founder and chairman of a food-and-beverage packaging company called International Dispensing Corporation. He and his wife allegedly paid $50,000 in a "donation" to Singer's Key Worldwide Foundation in exchange for a proctor to correct their daughter's ACT exam.

The case's scope was wide, and indictments or charges were filed across the country, from Massachusetts and Florida to California. The parents being charged, Lelling said at the press conference, were those of wealth, able give their children "every legitimate advantage. Instead [they] chose to corrupt and illegally manipulate the system for their benefit."

Among other figures in business named in the complaint or FBI affidavit are:

  • Todd Blake, an entrepreneur and investor based in San Francisco
  • Manuel Henriquez, chairman and CEO of Hercules Technology Growth Capital
  • Agustin Huneeus, head of the Huneeus vineyard in Napa Valley
  • Douglas Hodge, a former CEO of Pimco investment management company
  • Marjorie "Margie" Klapper, co-owner of M&M Bling, a jewelry business in Menlo Park, California
  • Bill McGlashan Jr., the founder and managing partner of TPG Growth, which manages investments in companies such as Airbnb and Uber. McGlashan is also co-founder and CEO of the Rise Fund, and co-founder and director of STX Entertainment and Evolution Media
  • Marci Palatella, of Healdsburg, California, founder of Preservation Distillery in Kentucky 
  • Devin Sloane, founder and CEO of a drinking and wastewater systems company in Los Angeles
  • John Wilson, a founder and CEO of a private equity and real estate development firm 
  • Robert Zangrillo, a founder and CEO of Dragon Global, a private investment firm based in Miami

Published on: Mar 12, 2019