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

A class-action civil lawsuit has been filed by two California college studentsagainst eight top universities in connection with the massive college admission 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 suit filed in U.S. District Court for the Northern District of California by Stanford University students Erica Olsen and Kalea Woods accuses each of the universities of being “negligent in failing to maintain adequate protocols and security measures in places to guarantee the sanctity of the college admissions process.”

And the suit, which claims more than $5 milllion in damages, says that as a result of the schemes “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.”

Although there are currently only two 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 include 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.

Also named as defendants are William “Rick” Singer and his college prepatory business, the Edge College & Career Network, who had 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.

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.”

The suit says that the plaintiff “Olsen has also been damaged because she is a student at Stanford University, another one of the universities plagued by the fraud scandal. Her degree is now not worth as much as it was before, because prospective employers may now question whether she was admitted to the university on her own merits, versus having parents who were willing to bribe school officials.”

And it says that her co-plaintiff Woods, at the time she applied to USC for admission, “similarly 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.

The lawsuit comes on the heels of a tsunami of media coverage of the charges against the “Desperate Housewives” star Huffman and “Full House” actress Loughlin, as well as against the other well-heeled defendants.

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 the University of Southern California.

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, dubbed Operation Varsity Blues by federal investigators.

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.

Posecutors allege that Hodge paid hundreds of thousands of dollars in bribes for his daughters’ admission into USC.

Source: CNBC

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