Police Files

Locals charged in largest college bribery scandal in history

On Tuesday, March 12, more than 50 people were charged by the Department of Justice in the largest college admissions scam in US history. Dubbed “Varsity Blues” by the FBI, the arrests include Laguna Beach residents, prominent business executives Douglas Hodge and Robert Flaxman, as well as fashion designer Mossimo Giannulli and his wife, actress Lori Loughlin, who owned a home in Laguna Beach for many years.

According to the 204-page affidavit, dozens of individuals indicted and arrested, including 13 defendants in Orange County and Los Angeles, were allegedly involved in the nationwide conspiracy that aided admission of students to elite universities through facilitated cheating on college entrance exams and purported athletic recruits.

Suspects allegedly paid bribes to sports coaches and administrators to help get the students admitted to top college institutions, including University of Southern California, University of California Los Angeles, Yale, Stanford, Georgetown, and Wake Forest University, among others, regardless of athletic or academic abilities. At this time, no university admissions personnel are suspected of any wrongdoing or crimes. 

At the center of the scandal is Newport Beach resident William “Rick” Singer, 58. Singer has acknowledged collecting approximately $25 million dating back at least a decade, through his for-profit college counseling and preparation business company, Edge College & Career Network, also known as “The Key,” and a nonprofit corporation he started as a purported charity.

Singer was charged with racketeering conspiracy, money laundering conspiracy, and obstruction of justice.

Those with Laguna Beach ties facing charges include Douglas Hodge, 61, Laguna Beach, former CEO of prominent investment management companies. According to reports, prosecutors allege Hodge used bribery to get his children admitted to USC and Georgetown as purported athletic recruits.

Hodge was charged with conspiracy to commit mail fraud and honest services mail fraud. The defendant appeared in Boston on Wednesday, March 13, and was released on conditions including a $500,000 secured bond. 

Founder and CEO of real estate development firm Robert Flaxman, 62, of Laguna Beach, was charged with conspiracy to commit mail fraud and honest services mail fraud. His initial appearance in federal court in Boston is set for March 29 at 2:30 p.m.

Fashion designer Mossimo Giannulli, 55, and his well-known actress wife Lori Loughlin, 54, of Los Angeles, were charged with conspiracy to commit mail fraud and honest services mail fraud. The defendants made their initial appearance in the Central District of California and were each released on $1 million bail. 

Loughlin and Giannulli used to own a home in Laguna Beach, which they reportedly listed for sale in 2009 for $12.99 million.

According to court documents, Giannulli and Loughlin submitted to USC’s admissions offices photos of their daughters on rowing machines. The couple allegedly paid $500,000 to have their two daughters attend the university by way of the school’s crew team, even though neither was reportedly a crew athlete.

Loughlin, known for her role as Aunt Becky in Full House and Fuller House, has also starred on Hallmark Channel on myriad projects, including When Calls the Heart. It was announced yesterday that Loughlin has been fired from Hallmark Channel and Netflix, according to reports.

Also charged for her alleged involvement in the scheme is Golden Globe-winning actress Felicity Huffman, among the 33 parents and 13 coaches and associates of Singer’s businesses, including two SAT and ACT test administrators. 

The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

-By Suzie Harrison

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