Wealthy Parents Coaches Accused in Massive Fraud
VAUSE: California Governor Gavin Newsom is set to sign an executive order which would suspend the state's death penalty. The moratorium will serve as an immediate reprieve for the 737 people sentenced to death in California which has the largest death row population in the U.S. And one of America's biggest criminal justice reform advocates has lent her support . Reality TV star Kim Kardashian tweeted, "Racial bias and unfairness went deep throughout the Justice system but especially when it comes to the death penalty." Everything that is wrong with the United States in terms of corruption, entitlement, the haves versus the have not seem to come together in what prosecutors have described as an unprecedented scam to secure much coveted place at an elite university. Fifty 50 people including two actresses, CEOs and colleges coaches are facing charges but this outrage is being felt across the country, especially for any kid who worked hard, played by the rules but was still denied a fair shot. Randi Kaye has details.</s>ANDREW LELLING, U.S. ATTORNEY FOR MASSACHUSETTS: We're here today to announce charges, in the largest college admission scam every prosecuted by the Department of Justice.</s>RANDI KAYE, CNN CORRESPONDENT: A jaw-dropping scam dubbed "Operation: Varsity Blues", involving at least 50 people accusing wealthy parents of allegedly cheating so their children would be admitted into prestigious schools. One of the schemes involved parents allegedly paying millions for fake athletic credentials just so their children could gain entry to college by being accepted to the school's athletic team. To be clear, these were not really student athletes.</s>LELLING: Singer helped parents take staged photographs of their children engaged in particular sports. In one example, the head women's soccer coach at Yale in exchange for $400,000 accepted an applicant as a recruit for the Yale women's team despite knowing that the applicant did not even play competitive soccer. The student was in fact admitted, and afterwards, the student's family paid Singer $1.2 million dollars.</s>KAYE: Singer -- the man he mentioned is William Rick Singer. Not only did he allegedly staged those photos but he also is accused of arranging for others to take online high school classes in place of the real students so those higher grades could be submitted instead. The money paid by wealthy parents was listed as contributions to his sham charity, Key Worldwide Foundation.</s>LELLING: Singer's clients paid him anywhere between $100,000 and $6.5 million.</s>KAYE: One of the 33 parents named in the indictment, actress Felicity Huffman best known for her role on "Desperate Housewives".</s>FELICITY HUFFMAN, ACTRESS: I forgot the keys to Mr. Tom's casa could you let me in, por favor.</s>KAYE: According to the criminal complaint, Huffman and her husband actor William H. Macy are accused of making a charitable contribution of $15,000 to the fake charity. Huffman is charged with conspiracy to commit mail fraud after allegedly paying Singer's organization. In a recorded phone call evidenced in the investigation she's heard saying, "We're going to do like we did with my older daughter." Singer response "Ok. So we'll take it with her and for her at Igor's place at the West Hollywood Test Center." Along with Huffman, actress Lori Loughlin who played Aunt Becky on "Full House" is also charged.</s>LORI LOUGHLIN, ACTRESS: I have a confession.</s>KAYE: Court documents say Loughlin and her fashion designer husband Mossimo Giannulli allegedly agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the University of Southern California crew team despite the fact, that neither daughter ever participated in the sport of rowing. And according to one of the daughters own YouTube post, she didn't care much for school either,</s>OLIVIA JADE GIANULLI, LORI LOUGHLIN'S DAUGHTER: But I do want the experience of like game days and partying. I don't really care about school as you guys all know.</s>KAYE: Their parents have been charged with conspiracy to commit mail fraud and honest services mail fraud. Worth noting, this was Loughlin on the "Today" show back in 2017 playing proud mom as she talked about sending her daughter off to college.</s>LOUGHLIN: I think I'm in complete denial.</s>UNIDENTIFIED FEMALE: Yes.</s>LOUGHLIN: I really am because when I think about it too much it will make me cry.</s>KAYE: Authorities seized fake charity account. Court documents show it had more than $5 million in it. Schools named in the complaint include USC, UCLA, Stanford, Georgetown, University of Texas in Austin, Yale University and others in Boston. Late today, the man behind the college scheme admitting in court, "I created a side door that would guarantee families would get in." Randi Kaye, CNN -- New York.</s>VAUSE: CNN's legal analyst Areva Martin joins us now from L.A. Let me start with this. This is stomach churning because it says to every kid who worked twice as hard for half as much that doesn't matter. You can do whatever you want to do, it doesn't count. Because the elites, the people with the money they'll just spend what they've got to spend and they'll do it illegally, they'll deceive, they'll lie, they'll cheat and they'll get their kids it no matter what. And for those other kids who missed out and it seems that all the kids who missed out, not just at those universities but they're not</s>AREVA MARTIN, CNN LEGAL ANALYST: Yes, that's a great question John. So one of the things that the U.S. Attorney said in the press conference this morning was that, the sentencing guidelines are very stiff in terms of the penalties for the crimes that they've been charged with upwards to 20 years. But they're going to look at each individual case. Some of these people obviously are going to enter into a plea agreements with the U.S. attorney. Some may become cooperating witnesses. So what each individual gets will depend on individual circumstance. You know, how much did they pay this Singer guy. You know, what was the level of their bribe? You know, what's their own criminal background. Other mitigating factors will come into play. But one thing that the U.S. Attorney said and I think we should not take lightly. He said look, we are not going to have two system of justice where people because they're affluent and have get a different sentence than those who don't have money. We already know in the college university admission process, that, you know, this an extreme form of a system that favors the rich and powerful. So when you think about legacy students, you think about the students of faculty members. There's already built into the process a mechanism by which those students that have money and power, get preferential treatment over students that don't have the same access to resources. So this is shocking, on so many levels. It's something that many of us have always known happened, just not at this level. And now it's been exposed. And what we're told by the U.S. Attorney is this isn't the end. This is the beginning for a very expansive investigation that may involved many other people being indicted including parents, school administrators and other individuals who have participated in this conspiracy.</s>VAUSE: There's two justice systems. We know that there is justice for the rich and there's justice for the people who aren't; and there's justice for people of color and justice for white folks. And you know, anyway.</s>MARTIN: Yes.</s>VAUSE: If you look at the parents who're being charged here, you know, not just the, you know, the small time TV actors. Look at CEOs, look at the chairman of the big law firm. And what that says to me, that's an indication that this was accepted. No one thought it was wrong, or that it is illegal. Or that it was punishable with a serious, you know penalties here. This is just how it was done WHEN YOU GET TO THAT LEVEL..</s>MARTIN: They didn't care John. When you read what is in that criminal affidavit, that partner in the law firm had an extensive conversation with Rick Singer, you know, trying to figure out if he would get caught. And I think at one point, he said, he didn't care about the ethics or the morality of what he was doing. He just wanted to make sure that he doesn't get caught.</s>VAUSE: Maybe does now.</s>MARTIN: Well, I'm sure he does now, but that's what so galling about this. You know, what's funny to me is, I grew up on the wrong side the tracks. And we were always told that education was the way to level the playing field. These people have everything. They have every advantage. We saw Lori Loughlin's daughter say she didn't even want to be at college. She was just there for the parties. This was really her mother's idea. This girl's already a social media influencer. She has over two million followers on YouTube. She has endorsement deals. So you have to ask the question why would parents go to such great length when they have already every advantage that you can imagine.</s>VAUSE: Is there any way to stop it? Is there</s>MARTIN: I totally agree with you. I'm not buying that all OF these kids were completely oblivious to this. You know THAT you haven't studied. You know that you've got mediocre or poor cards throughout high school. So if you get an admission letter saying you've been accepted to Yale and you've been a poor student, it doesn't take, you know -- you don't need to be a rocket scientist to figure out something is wrong with this picture. So it's not only the students that I think also need to be, you know, looked at more closely. But what about the other people in these colleges. I'm not buying that one college administrator had the power to admit students. College admission process, this involved lots of people. So I hope this investigation includes looking at college presidents, deans, provosts and the other people that are involved in the admissions process. Because you have to imagine that these schools had a culture that didn't focus on accountability and put profits, you know, over accountability and ensuring that fairness was served and done with respect to the admissions and that students like these students didn't get slots that should have gone to hardworking students that earned the right to be at those colleges.</s>VAUSE: Here's the icing on the outrage right. "As part of the scheme, William dinger describes the bribe payments from clients as charitable contributions to the Key Worldwide Foundation. Afterward a KWF employee would mail letters to the client begging them for their donations. Your generosity will allow us to move forward with our plans to provide educational and self-enrichment programs to disadvantaged used, the letter said according to prosecutors. So he said this, digging in on one hand they get the kids in the university where they should be getting in. And then because this is a charitable contribution they could use it as part of the tax deduction on their income tax for the year. It's outrageous.</s>MARTIN: They claim them as, you know, charitable contributions made to a legitimate 501-c3 organization. They took the deductions. But you raise such an interesting point, John about the mission of this fraudulent nonprofit was to help disadvantaged. How ironic is that. That the so-called mission of this nonprofit was to help the very students whose seats are being taken from them because these parents are bribing the universities. And we should talk about the disabled students too because this lawyer, this law partner flew his daughter to Los Angels, got a bogus diagnosis that she was disabled, that she had some kind of learning disability. So that she can request more time to take the college admissions exam. An exam which, by the way, was either doctored or somehow, you know, there was cheating with respect to that exam. So now every time a disabled student -- I happen to be the parent of one, requests additional time which is legitimate and legal, there's going to be some question in the mind of that test taking organization of that college about, whether this person does truly have disability that would warrant that additional time. So people that are victims in this whole fraudulent scheme.</s>VAUSE: Yes. And when you think about, you know, we're out of time Areva -- I know parents, especially friends of ours who spent every waking hours since their kids were born working on getting them into an elite school because that's the opportunity that they want, and it's all for nothing you know, in some ways. But you know, we'll see what happens here. Areva -- thank you.</s>MARTIN: My final thought is John -- get a tutor, get a tutor. You know, get a tutor.</s>VAUSE: Yes. I mean, you know --</s>MARTIN: Nothing The thing criminal about tutors</s>VAUSE: It seems like everything is rigged and that's why people are angry. Areva -- thank you</s>MARTIN: Absolutely. Thanks -- John.</s>VAUSE: And thank you for watching CNN NEWSROOM. I'm John Vause. The news continues on CNN right after this.