This doesn’t happen every day: Hollywood stars Felicity Huffman and Lori Loughlin and Loughlin‘s fashion designer husband, Mossimo Giannulli, were arrested Tuesday and charged with paying hundr of thousands of dollars in bribes to cheat their daughters into college.
The three were charged along with nearly 50 other people in a scheme in which wealthy parents allegedly bribed college coaches and insiders at college testing centers to help get their children into some of the most elite schools in the country, federal prosecutors said at a dramatic news conference in Boston.
Huffman was arrested Tuesday in Los Angeles, and by dinner was released on $250,000 bail. Loughlin was not yet in custody but was expected to make a court appearance on Wednesday afternoon, said Thom Mrozek, spokesman for the U.S. Attorney’s Office Central District in Los Angeles.
USA TODAY examined pages of court documents filed by the FBI and the U.S. Attorney’s Office in Boston to find out what prosecutors allege as the reasons why the three have been charged with mail fraud and “honest services mail fraud,” or a scheme “depriving another of the intangible right of honest services.”
In other words, by allegedly bribing school officials, they deprived other applicants of a fair chance at admission because the parents paid for those spots, says James Cohen, a law professor at Fordham University in New York.
“If I’m paying people in admissions that kind of money, I’m not depriving myself. I don’t care about honest services,” Cohen told USA TODAY. “In fact, that’s the last thing I want. But I’m depriving other people of the use of honest services.”
Here’s what the court documents say:
Her “spouse”: Macy is not on the list of nearly 40 parents who were charged with participating in the nationwide bribery scheme, and the FBI affidavit lists him only as “spouse.” But the affidavit says Huffman‘s “spouse” participated in conversations at their Los Angeles home with a confidential witness about the scheme.
What did they allegedly do?: Huffman and her “spouse” made a “purported” charitable donation of $15,000 to Key Worldwide Foundation, a Newport Beach, Calif.,-based charitable organization, in February 2018, according to the affidavit.
The “contribution” was made to “participate in the college entrance exam cheating scheme on behalf of her older daughter” prior to the December 2017 SAT college entrance exam. The SAT is the most common exam high-school students take before applying to colleges and universities..
The way the scheme worked, according to the affidavit, an individual identified as CW-1 (cooperating witness) told Huffman and her spouse that he “controlled” a college testing center where her daughter could take the college SAT and a “third party” would purport to proctor (or monitor during the exam) the daughter and “secretly correct her answers afterwards.”
The daughter took the test at the West Hollywood Test Center instead of at her own high school. According to the affidavit, another individual, identified as CW-2, flew from Tampa to Los Angeles in December to proctor the SAT test.
CW-2 told investigators that each time he was in LA to proctor an exam, he “facilitated cheating, either by correcting the student’s answers after the test or by actively assisting the student during the exam.”
“Ultimately, Huffman‘s daughter scored 1420 on the SAT, an improvement of approximately 400 points over her PSAT (the preliminary test to the SAT), taken without CW-2 a year earlier,” the affidavit adds.
Why wasn’t Macy charged? Bo Dietl, chairman CEO at Beau Dietl Associates, and a former New York Police detective who styles himself an expert in celebrity criminal investigations, says that in cases where groups or even families are suspected of fraud, investigators must “look at each person individually and determine culpability.”
They can’t “just assume they are involved in the illicit activity because they are members of the same family, company, or organization,” Dietl told USA TODAY. “Investigating complicated fraud matters demands looking at each person’s independent actions and their actions in collaboration with the larger group.”
Dietl said he’s seen cases in which spouses were left “totally in the dark” as to what their husbands and wives were doing. “I’ve seen CEOs defrauded by their own employees,” he said. Legitimate investigators should never assume everyone is in on it – they have to prove it, he said.
Their kids: The daytime Emmy-award winning actress (“Full House”) and her husband, a fashion designer whose Mossimo label is a major Target brand, have two daughters together, Isabella Rose, 20, and Olivia Jade, 19, who has a YouTube channel of beauty tips.
What did they allegedly do?: Investigators say in the affidavit that in July 2016, the couple “agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC (University of Southern California) crew team, despite the fact they did not participate in crew, thereby facilitating their admission to USC.”
CW-1 advised Giannulli in a July 2016 email that his older daughter‘s academic qualifications were at or just below the “low end” of USC’s admission standards. “Thereafter, the Giannullis agreed with CW-1 to use bribes to facilitate her admission to USC as a recruited crew coxswain, even though she did not row competitively or otherwise participate in crew,” the affidavit says.
In October 2016, CW-1 instructed the couple to “send $50,000 to Donna Heinel, senior women‘s associate athletic director at USC.” The daughter was notified she was admitted in March 2017, and one week later the couple was sent an invoice from Key Worldwide Foundation (KWF) for $200,000.
In April, Giannulli wired the money to KWF. “The following day, an employee of CW-1 sent the Giannullis a receipt from KWF falsely indicated that ‘no goods or services were exchanged’ for the purported donation” to the purported charity. (In order to qualify as a charity and as a tax deduction, no goods or services can be exchanged for supposed charitable donations.”
According to one of Olivia Jade’s online videos, she wasn’t that interested in college anyway because of her extensive work schedule, as she explained to her nearly 2 million followers in the summer of 2018.
“I don’t know how much of school I’m gonna attend,” she said in the video. “But I’m gonna go in and talk to my deans and everyone, and hope that I can try and balance it all. But I do want the experience of, like, game days, partying…I don’t really care about school, as you guys all know.”
She later apologized in another video.
What happens next?
What time and penalties do these charges carry if there is a conviction?
Each count carries a minimum of five years in prison, Cohen said.
“And the fines are quite substantial – in the hundr of thousands of dollars – but the fines seem to be the least of these people’s worries,” Cohen said, given they were allegedly willing to pay substantial amounts to cheat.
“So you’ve got possible jail time and there will probably be more than one count in respect to each individual,” Cohen added. “So you have a possibility of both jail and a significant fine on the separate counts.”
Huffman appeared in court on Tuesday, and a judge released her on $250,000 bail but said she must restrict her travel to the continental United States. Loughlin is due in court on Wednesday. Her husband was arrested Tuesday and was released on $1 million bail.
What will happen in court?
Some of the accused will be in court to plead guilty, Cohen said. Prosecutors at their news conference also said that at least two of the accused would plead guilty on Tuesday.
“The ones who plead guilty are most likely doing so because they’re cooperating with prosecutors…and their deal is already set up, and by deal I mean they’re pleading to one or two or four counts.”
Afterwards, their cases will then be sent for a probationary report or a pre-sentencing investigation. “It will be adjourned for two to three months – maybe longer depending on the backlog in the district of Massachusetts – and they’ll take it from there.”
Because it’s a high-profile case, the accused who plead not guilty may have to post bond. “But it’s very unlikely for a bond to be set at such a level that anybody will stay in custody because they can’t make bail,” Cohen said.
Prosecutors may also ask for electronic monitoring and the surrender of passports.
How likely are these cases to go to trial?
Cohen says it would be unusual in federal court if any of these cases to go to trial.
“And that’s because the likelihood is the federal government has everything buttoned down – (i.e.) they have everything on tape. And there are also documents,” Cohen said. “The proof is going to be pretty solid. The prosecutors don’t have to go to extraordinary effort to get the evidence.”
The best course for the accused may be a plea deal, Cohen said. “I think a plea is likely going to be the best bargain you’re going to get even though it may not seem like that to these people in the moment.
“Don’t forget this is a universe in which this kind of stuff – criminal prosecution – is foreign. Neither the parents nor the kids have any contact with the criminal justice system. And they’re not going to like what they see.”