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Ex-CEOs to plead guilty to roles in U.S. college admissions scandal

Ex-CEOs to plead guilty to roles in U.S. college admissions scandal

© Reuters. FILE PHOTO: Manuel Henriquez, founder and chairman and CEO of Hercules Technology Growth Capital, facing charges in a nationwide college admissions cheating scheme, enters federal court in Boston

By Nate Raymond

BOSTON (Reuters) – Three wealthy parents including the former chief executives of bond manager Pimco and specialty finance lender Hercules Capital Inc (N:) will appear in court on Monday to plead guilty to participating in a vast U.S. college admissions cheating and fraud scheme.

Federal prosecutors in Boston allege that ex-Pimco CEO Douglas Hodge, Hercules Capital founder Manuel Henriquez and onetime food manufacturer executive Michelle Janavs paid hundreds of thousands of dollars to have their children admitted to universities as fake athletic recruits.

They are among 52 people charged with participating in a vast scheme in which wealthy parents conspired with a California college admissions consultant to use bribery and other forms of fraud to secure the admission of their children to top schools.

William “Rick” Singer, the consultant, pleaded guilty in March to charges he facilitated cheating on college entrance exams and helped bribe sports coaches at universities to present his clients’ children as fake athletic recruits.

The 35 parents charged in the investigation include executives and celebrities, such as “Desperate Housewives” star Felicity Huffman and “Full House” actress Lori Loughlin.

Huffman reported to prison last week to serve a 14-day term after admitting she engaged in the college exam cheating scheme. Loughlin has pleaded not guilty.

Hodge was CEO of Allianz SE’s (DE:) Pimco, the world’s largest bond manager, from 2014 to 2016. Prior to his arrest in March, Henriquez was chairman and CEO of Palo Alto, California-based Hercules.

Janavs was formerly an executive at her family’s food manufacturing company Chef America, which produced the microwavable snack Hot Pockets before being bought by Nestle for $2.6 billion in 2002.

Prosecutors alleged that Hodge paid $525,000 to facilitate the admission of his daughter and son to the University of Southern (NYSE:) California as soccer and football recruits through the use of bribery and falsified athletic profiles.

Henriquez and his wife turned to Singer to help fraudulently inflate their two daughters’ entrance exam scores and also paid him $400,000 to bribe a tennis coach to help their oldest gain admission to Georgetown University, prosecutors alleged.

Janavs similarly conspired with Singer to pay $600,000 to facilitate her son’s admission to Georgetown as a fake tennis recruit and her older daughter’s admission to USC as a volleyball recruit, according to an indictment.

She also paid Singer $100,000 to have a corrupt exam proctor to secretly correct her two daughters’ answers on the ACT exam, prosecutors said.

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Source : Reuters Link