Scoff all you want, but maybe Lori Loughlin and Mossimo Giannulli were on the right track after all. A recommendation from the US Probation and Pretrial Services has a federal judge questioning who got victimized in the massive college-admissions fraud scheme cooked up by Rick Singer. And if the judge rules against prosecutors, the answer might leave a lot of egg all over some faces at the Department of Justice:
Prosecutors have said the victims are the universities and testing companies, and that the amount that the parents paid in the fraud should be used as a substitute for the victims’ losses. Parents who paid more in bribes should face harsher penalties, they argue.
But the US Probation and Pretrial Services, which prepares pre-sentence investigation reports for each defendant, say that the universities and testing companies suffered no monetary harm at all. The price of the parents’ bribes is therefore not relevant to any sentences, the office argued.
Federal court Judge Indira Talwani heard arguments on this debate in federal court Tuesday. She is expected to make a decision before actress Felicity Huffman’s expected sentencing hearing on Friday.
If Talwani sides with the probation office’s arguments, the parents implicated in the case — including Huffman and actress Lori Loughlin — could face shorter possible prison sentences or even just probation.
Maybe not victims per se, but this paints them as something less than villains of the fraud. This could make for an embarrassing anti-climax to Operation Varsity Blues, which seemed a little backwards from the start. Prosecutors cut their deal with Rick Singer, the man who got the obvious reward from the fraud scheme he created and set in motion, in order to get to the parents who coughed up the money he took. Under normal circumstances, wouldn’t it be the other way around — that prosecutors would go after the person who conducted the fraud through those who paid into it?
In using Singer to go after the parents, the DoJ sent the implicit signal that they were more responsible for the fraud than its the architect. In retrospect, that doesn’t sound tenable; the only people that actually lost money in the fraud were the people that the DoJ targeted the most, if the judge accepts the USPPS analysis. Granted, these parents had corrupt motives in participating in Singer’s scheme, but it wasn’t a Ponzi or pyramid scheme in which they also took monetary reward from the fraud. All they got was status-symbol affirmation via their childrens’ admissions to highly regarded universities, whether their kids wanted it or not.
That’s not to say that there weren’t other and more worthy victims. The purest victims in this scheme were the students who lost access to the slots taken by the celebrities’ kids, but they got victimized by Singer and school personnel more directly than by the parents. The universities got damaged by the coaches and administrators who took part in Singer’s fraud, but that’s not on the parents either. That falls on those coaches and administrators who facilitated taking the money out of the parents’ pockets, and who profited from the fraud.
All of this goes back to the original decision by prosecutors to cut the deal with Singer to get to the parents who paid Singer, and through him the coaches and the administrators. It’s going to be tough for the DoJ to explain that decision in light of the USPPS report in a way that doesn’t lead to the conclusion that the DoJ really wanted to nail some celebrities to make a splashy case.
Maybe they’ll get lucky and Talwani will throw the book at Huffman. If not, the DoJ might want to get settlements involving fines and community service from Loughlin, Giannulli, and the rest of the celebrity dilettantes and close out Operation Varsity Blues before it comes Operation Expulsion With Extreme Prejudice.