14 Bay Area residents, including Stanford sailing coach, charged in college bribery scheme

OAKLAND, Calif. (KTVU/AP) - A now-fired Stanford University sailing coach, along with 13 other Bay Area CEOs, real estate moguls, a jewelry store owner and a vintner were among the 50 people charged in a nationwide college-admissions scam, federal prosecutors said on Tuesday.

Dubbed "Operation Varsity Blues," the FBI and prosecutors in Boston described a detailed scheme where a total of 33 wealthy parents bribed college coaches and insiders at testing centers to help get their children into some of the most elite schools in the country. Some parents paid in Facebook stock. Other parents either Photoshopped their children's faces onto athletes' bodies, or pretended their children were someone else in pictures.

"These parents are a catalog of wealth and privilege," U.S. Attorney Andrew Lelling said in announcing the $25 million federal bribery case at a news conference in Boston.

The most high-profile names to come out of the biggest college admissions scam ever prosecuted by the U.S. Justice Department were Hollywood actresses Felicity Huffman and Lori Loughlin.  

Loughlin, who was charged along with her husband, fashion designer Mossimo Giannulli, appeared in the ABC sitcom "Full House," while Huffman starred in ABC's "Desperate Housewives." Both were charged with fraud and conspiracy. Neither could be reached for comment.

Prosecutors said parents paid an admissions consultant a total of $25 million from 2011 through last month to bribe coaches and administrators to label their children as recruited athletes, to alter test scores and to have others take online classes to boost their children's chances of getting into schools. Parents spent anywhere from $200,000 to $6.5 million to guarantee their children's admission, officials said. No students were charged. Authorities said in many cases the teenagers were not aware of the fraud.

Read the full list of those charged under Operation Varsity Blues

Status updates on those charged under Operation Varsity Blues

Read the full federal indictment of Operation Varsity Blues

None of the schools, including Stanford, are part of the investigation, Lelling said.

"We have not seen the schools as co-conspirators," he added.

The mastermind? William Rick Singer, 59, of Newport Beach. He has been cooperating with federal authorities since last fall. On Tuesday, he pleaded guilty to racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States, and obstruction of justices in federal court in Boston.

Singer owns the Edge College & Career Network, also known as The Key — a for-profit college counseling and preparation company offering families help in getting students into competitive colleges and universities. He also runs the Key Worldwide Foundation, which purports to be a charity and which prosecutors say was used to disguise the true nature of payments from parents.

Court papers indicate despite being a federal informant, Singer also tipped off several families that his conversations were being recorded and warned parents not to incriminate themselves.

In the Bay Area, Stanford sailing coach John Nicholas Vandemoer agreed to designate the child of one Singer's clients as a recruit for the team in exchange for a payment to that program in 2017, federal documents allege. Singer helped create a student-athlete application to Stanford by falsely claiming the unidentified incoming student was a competitive sailor.

By May 2018, the would-be student deferred his application to Stanford for a year and Singer directed a $110,000 payment from one of his charity’s accounts to the Stanford sailing program in exchange for the coach’s agreement to designate the boy as a recruit the next year, according to the court documents.

Later that summer, the boy decided not to go to Stanford. But Vandemoer allegedly agreed with Singer to use that same recruiting spot for another of Singer’s clients in exchange for a $500,000 payment to the program, prosecutors allege.

Vandemoer, 41, pleaded guilty Tuesday in Boston to charges related to the case, according to U.S. Department of Justice officials. He could not be reached for comment on Tuesday through his Stanford email and KTVU was unsuccessful in tracking down his phone number. Court records show he is scheduled to be sentenced in June and faces a maximum of 20 years in prison. 

In a statement on Tuesday, Stanford said that the university has been cooperating with the investigation and will undertake an internal review to make sure that no one else at the school was involved. Stanford also said that Vandemoer was fired. 

Stanford's president and provost issued a lengthy joint statement, which said this conduct is contrary to the University's values. 

“We will ensure that Stanford will not benefit from the monies that were contributed to the Stanford sailing program as part of this fraudulent activity," the statement read in part. 

The Department of Justice also provided a full list of those charged in Operation Varsity Blues, including those from the Bay Area. They are:

Diane Blake, 55, an executive at a retail merchandising firm and Todd Blake, 53, an entrepreneur and investor, both live in Ross, Calif. According to the criminal complaint, the Blakes agreed to pay $250,000 in order to facilitate their daughter’s admission to USC as a purported volleyball recruit. Until 2018, Todd Blake was a trustee for nine years at the K-8 Ross School District, according to his Twitter account, where he also posted his excitement over his daughter’s enrollment at USC.  KTVU emailed Diane Blake and left a voicemail for her husband seeking comment. 

Amy Colburn, 59, and Gregory Colburn, 61, both of Palo Alto, Calif. The Colburns are accused of paying $25,000 to have someone else take their son's SAT test. A receptionist at Gregory Colburn's  office where he is an oncologist, said he was away on a "family emergency." 

Elizabeth Henriquez, 56, and Manuel Henriquez, 55, both of Atherton, Calif., founder, chairman and CEO of a publicly traded specialty finance company. Court documents allege the Henriquezes participated in the college entrance exam cheating scheme on four separate occasions, for their two daughters.  In addition, they conspired to bribe the head tennis coach at Georgetown University, to designate their older daughter as a tennis recruit in order to facilitate her admission
to the university, prosecutors allege.  The proctor then “‘gloated’ with Elizabeth Henriquez and her daughter about the fact that they had cheated and gotten away with it, the documents allege. KTVU sent an email seeking comment to Manuel Henriquez's company but did not get an immediate response. Both husband and wife self-surrendered on Tuesday and were released on $500,000 bond, court records show.

On Wednesday, Manuel Henriquez's company announced that he will be replaced as CEO and chairman of Hercules Capital in Palo Alto. Hercules said Henriquez will still hold a seat on the board and will serve as an adviser. Henriquez was arrested in New York City and released on $500,000 bail after a brief appearance in Manhattan federal court Tuesday. Shares of the hedge fund plunged 9 percent on word of Henriquez' arrest Tuesday.

Agustin Huneeus Jr., 53, of San Francisco, Calif., a prominent Napa Valley wine magnate. Prosecutors allege he tried to bribe the water polo coach at USC to get his daughter into school. Acccording to court documents, he paid for the results of his daughter's SAT exam to be altered resulting in a score of 1380. After the exam, he complained that it should have been a 1550 too which Singer replied "No. ’Cause I would have got investigated for sure based on her grades."  Huneeus also admitted sending the college a photo of his daughter playing water polo when it was not her. His children attend Marin Academy, a parent there said, and he has traditionally provided free wine for school events. KTVU sent an email to his company, but did not immediately hear back. 

Bruce Isackson, 61, president of a real estate development firm; and Davina Isackson, 55, both of Hillsborough, Calif. They are alleged to have exchanged more than $250,000 in Facebook stock to secure their daughter's admission to UCLA as a purported soccer recruit. They couldn't be reached for comment by phone or Facebook message.

Marjorie Klapper, 50, of Menlo Park, Calif., co-owner of jewelry business. According to the criminal complaint, Klapper paid $15,000 to alter her son's ACT score. As a result, her son received a score of 30 out of a possible 36 on the ACT exam.  Klapper e-mailed a copy of the score to Singer noting: “Omg. I guess he’s not testing again.” Singer replied, “Yep, he is brilliant.”  Her voicemail at work was full when KTVU tried to contact her. 

William McGlashan Jr., 55, of Mill Valley, Calif., senior executive at a global equity firm. He is alleged to have participated in both the college entrance exam cheating scheme and the college recruitement scheme, including by conspiring to bribe the senior associate athletic director at USC facilitate his son’s admission to USC as a recruited athlete. McGlashan and a fraudulent consultant also discussed creating a fake sports profile for his son, allowing him to get into USC as a recruited athlete, authorities said. The consultant asked for a photo of the teen so it could be Photoshopped onto the face of a football kicker.

“Let me look through what I have,” McGlashan allegedly said in a recorded conversation. “Pretty funny. The way the world works these days is unbelievable.”

The court filings suggest that McGlashan’s son was oblivious to his father’s alleged scheming.

KTVU reached out to a representative from his company TPG, who released this statement, “As a result of the charges of personal misconduct against Bill McGlashan, we have placed Mr. McGlashan on indefinite administrative leave effective immediately. Jim Coulter, Co-CEO of TPG, will be interim managing partner of TPG Growth and The Rise Fund.  Mr. Coulter will, in partnership with the organization’s executive team, lead all investment work for both going forward.”

Peter Jan Sartorio, 53, of Menlo Park, Calif., packaged food entrepreneur. According to the complaint, he paid $15,000 in cash to have his daughter's answers corrected on the college entrance exam. His daughter received a score of 27 out of a possible 36 on the ACT, which placed her in approximately the 86th percentile. Although she had not previously taken the ACT, she had previously earned scores of 900 and 960 out of a possible 1600 in successive administrations of the PSAT, which placed her between the 42nd and 51st percentile for her grade level. The Sartorio home voicemail was full on Tuesday. 

Marci Palatella, 63, of Healdsburg, Calif., CEO of Preservation Distillery Bardstwon, where a person answered the phone saying, "We don't know anything. We have no comment." 

Palatella is alleged to have  taken part in both the college entrance exam cheating and the athletic recruitment schemes, by falsely describing her son as a long snapper, in order to facilitate his admission to USC as a football recruit.

According to the complaint, Palatella said she and her spouse “laugh every day” about how grateful they were for the services, “We’re like, it was worth every cent." 

The Associated Press contributed to this report.

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