Articles Posted in White Collar Crime

Published on:

A federal law enforcement investigation codenamed “Operation Varsity Blues” recently resulted in the arrests of dozens of people for allegedly conspiring to fraudulently obtain admissions into selective universities. Fifty people have been accused of working together to bribe university athletic coaches, submit fraudulent college applications, cheat on college entrance exams, and otherwise bribe college officials into admitting otherwise undeserving applicants. The accused individuals include two former Hollywood actresses – Felicity Huffman and Lori McLaughlin (who famously portrayed “Aunt Becky” on the TV show “Full House”) – as well as wealthy hedge fund managers and the chair of international law firm Wilkie Farr & Gallagher, among others. Wealthy parents paid as much as $6.5 million in bribes and fraudulent payments to get their children into the universities of their choice, including Stanford, Yale, USC and others. The case has seized the national attention as an example of the privileged elite abusing their power and influence, and the Department of Justice states that this is the largest college admissions scandal that it has ever prosecuted.

The case began as many federal investigations do – with an undercover cooperator. Somehow, law enforcement investigators with the FBI identified William Rick Singer, the founder and chief executive officer of a nonprofit “college placement organization” called the Key, as a person engaged in unlawful activity.  Though the precise details have not yet been shared, it is clear that they ultimately confronted him with the evidence of his illegal activity and made a deal with him: cooperate against the people who had enlisted his help in order to minimize his eventual punishment.

Mr. Singer then started recording his telephone calls and conversations with his criminal clients. Those calls apparently revealed a wide-ranging series of scams designed to get students into the schools of their choice. For example, Singer arranged for students who had struggled on the college entrance exams to get favorable disability diagnosis from an enlisted medical professional so as to get more time to take their tests. Then, he also arranged for the prospective students to take their college placement tests under the supervision of a paid-for proctor who either corrected their answers or permitted someone else to take their tests for them. Singer made arrangements to have students appear to be successful athletes when they were not, or flat-out bribed college athletic coaches into agreeing to tell the admissions office that they needed the students for their college sports teams. Some of the college coaches were allegedly paid hundreds of thousands of dollars to fraudulently accept students onto their teams (and therefore, into the school) without the relevant athletic credentials.

Published on:

Today, a federal jury in Virginia found President Trump’s former campaign manager, Paul Manafort, guilty of eight of the eighteen crimes contained in an indictment filed against him. Specifically, Manafort was found guilty of five tax fraud charges, one charge of hiding foreign bank accounts and two counts of bank fraud. The question now is how much jail time he will receive from the sentencing judge.

As a preliminary matter, for the purposes of this analysis, we assume that Mr. Manafort will not be pardoned by the President. Also, we assume that Mr. Manafort will not be convicted of any other charges. The judge in this trial declared a mistrial as to ten of the eighteen counts in the indictment on account of the jury’s inability to decide guilt or innocence on those charges, but that does not mean that Manafort is clear of those charges. Indeed, prosecutors could attempt to convict him again with a new jury. However, I expect that will not happen, as the prosecutors are likely satisfied by the result, and convicting Manafort on the remaining charges would not really change things very much.

Federal sentencing can be extraordinarily complex and is often very uncertain. By statute, a sentencing court must impose a sentence “sufficient, but not greater than necessary,” to serve the ends of justice. 18 U.S.C. § 3553(a). A sentencing judge is obviously constrained by the statutory maximums and minimums for the crimes of conviction, but oftentimes, the crimes have enormously wide sentencing possibilities (for example, the bank fraud charge for which Manafort was convicted has a potential statutory sentence of between zero and thirty years in prison, 18 U.S.C. 1344). So, federal judges look to the U.S. Sentencing Guidelines, promulgated by the federal government.