Government seeks higher sentences

Federal prosecutors allege the parents’ part in the admissions scheme caused considerable damages to universities including USC. (Vincent Leo | Daily Trojan)

The government intends to seek sentences higher than the sentencing guidelines for four parents — including two USC parents — in the college admissions case, according to a memorandum filed in federal court Monday.

In the memorandum, federal prosecutors requested sentences exceeding guidelines for those parents named in the admissions case they said were exceptionally culpable. The prosecution cited the number of times each parent employed admissions scheme organizer William “Rick” Singer’s “side doors” and the amount of money they paid to cheat on college entrance exams and bribe college administrators for their children’s admission.

Douglas Hodge, a former investment company CEO who pleaded guilty in October to conspiracy to commit mail and wire fraud and honest services mail and wire fraud and conspiracy to commit money laundering, worked with Singer over the course of 11 years to arrange for two of his children’s fraudulent admission to USC and two to Georgetown University before attempting  the same for his fifth child with Loyola Marymount University.

Hot Pockets executive Michelle Janavs pleaded guilty in October to conspiracy to commit mail and wire fraud and honest services mail and wire fraud and conspiracy to commit money laundering for paying $100,000 to rig her two daughters’ ACT scores and $200,000 to bribe senior associate athletic director Donna Heinel to admit her daughter to USC as a beach volleyball recruit.

Prosecutors recommended a two-year sentence for Hodge in addition to a $200,000 fine, three years of supervised release and 300 hours of community service, higher than the zero to six months prescribed by the sentencing guidelines. They requested a penalty of 21 months in prison, a $175,000 fine, three years of supervised release and 250 hours of community service for Janavs.

The longest sentence issued to date in the Operation Varsity Blues case was six months in prison, one year of supervised release, a $150,000 fine and 200 hours of community service to USC alumnus and parent Toby Macfarlane in November after he paid $450,000 for his two children’s admission. Prior to the filing of the memorandum, the highest sentence recommendation the government made was 18 months in prison.

The prosecutors argued that penalizing parents who paid hundreds of thousands of dollars to bribe university officials equally to those who paid $15,000 to rig an exam would be unjust and stated that federal sentencing guidelines recommend adjusting sentences up or down based on the scale of the loss caused by the crime. 

Because the personal gains from each case of fraud in the admissions scandal is difficult to quantify, the federal government stated it used the size of the payments the parents made to Singer to facilitate their children’s admission as a gauge of appropriate punishment. The memorandum also noted the parents defrauded the IRS by claiming their illegitimate donations as deductions on their tax returns and involved their children in the scheme, exacerbating the charges’ gravity.

Government prosecutors stated that the scheme rendered significant financial losses to the universities the parents defrauded. They listed the salaries paid to employees who participated in the admissions scheme, the thorough investigations each university launched into its own admissions process and the reputational damage resulting in a decrease in applications for admission following the scandal as costs shouldered by the institutions that merited restitution from the parents.

Because USC has not yet released application data for the Class of 2024, the prosecution’s predictions of lower application numbers and the resulting loss of revenue could not be verified. However, the memorandum cited a May E-Poll Market Research poll that found “cheating” and “scandal” to be the words most often associated with the University in the wake of the release of the federal admissions investigation as evidence of reputational harm. 

In March, USC announced an internal investigation of 33 students’ admissions files and several donations made in connection with the scandal, has hired private consultants to review the University’s admissions practices and has begun to implement a more intensive process for accepting athletic recruits.