On Friday Douglas Hodge, former CEO of Pacific Investment Management Co. (Pimco), faced U.S. District Judge Nathaniel Gorton in court in Boston. It did not go well for him. He received a prison sentence of nine months, the longest sentence handed down so far in the Operation Varsity Blues scandal.
Hodge is a serial abuser of the college admissions process. Mr. Hodge paid $850,000 to William “Rick” Singer to get four of his children accepted into Georgetown and USC and was in the process of doing the same for his fifth child. Of the 36 parents charged in this scandal, he shelled out the most money to cheat the college admissions system. His fine of $750,000 is less than the amount he spent to participate in Singer’s scheme. Hodge also was sentenced to two years of supervised release and 500 hours of community service.
Last October Hodges pleaded guilty to charges of fraud conspiracy and money-laundering conspiracy. He also admitted to working with Mr. Singer for over ten years. Apparently he didn’t go the way of some parents by just hiring someone to falsify a standardized test result for his kid (like actress Felicity Huffman did) – he went the route of phony athletic scholarships, though none of them are athletic students. He was working on getting his fifth child into Loyola Marymount University.
The judge was so disgusted with him that he couldn’t even find a word strong enough to use in English and turned to Yiddish.
“Mr. Hodge, your conduct in this whole sordid affair is appalling and mind-boggling,” U.S. District Judge Nathaniel Gorton told the father in front of a packed courtroom. “There is no term in the English language that describes your conduct as well as the Yiddish term of chutzpah.”
Hodge threw himself at the mercy of the court by apologizing and accepting blame while his attorney, Brien O’Connor, argued for the lower end of the sentencing guidelines requested by the prosecution. Prosecutors asked for two years in prison, three years of supervised release, a $200,000 fine and 300 hours of community service. O’Connor spoke about Hodge’s charitable work in education and over $30 million in contributions to various organizations between 2007 and 2018.
Mr. Hodge gave a tearful apology in court and, after the judge imposed his sentence, hugged a friend who had come with him. “I know my actions were inconsistent with the person I tried to be in this world,” he told the judge.
“I know that I unfairly, and ultimately illegally, tipped the scales in favor of my children over others, over the hopes and dreams of other parents, who had the same aspirations for their children as I did for mine,” Mr. Hodge said in court Friday. He said he wasn’t driven by ego, but rather sought to give his own children a transformative educational experience like he had received.
He also tried to protect his children by saying they “did nothing to deserve the consequences they have suffered as a result of my actions.” That may be important further down the line if prosecutors choose to punish the students involved. It has been mentioned that if they were actively a part of the scheme then they may be held accountable, too. I don’t think that will happen.
Noting the disconnect of Hodge’s request for leniency because he used his wealth for good works, besides buying access for his kids, Assistant U.S. Attorney Justin O’Connell acknowledged those good works. Then he argued that while that is all well and good, Hodge’s behavior when it came to his own kids was arrogant and indicating he lived as though the rules don’t apply to him. Hodge hurt students who may have been qualified to take the slots his children took.
So, the judge gave Hodge a 9-month sentence in prison instead of a one year sentence as a nod to his past philanthropic works. It is the longest sentence delivered so far in the national college admissions fraud scandal. He called Hodge a “common thief.” And, he denied the request by Hodge’s attorney to split his sentence and home confinement. Hodge lives in a mansion in Laguna Beach, California so home confinement is no punishment at all.
To add insult to injury, one year Hodge even took a tax deduction for some of his bribes. That seems like a sloppy mistake if he was trying to keep his actions under the radar. Why open himself up to the feds like that?
O’Connell also noted that one year, during which Hodge reported $26 million in income, “he took a tax deduction off for his $200,000 bribe.”
“Hodge couldn’t even be bothered to pay his full bribe, passing off part of that bill to the American taxpayer,” O’Connell said.
There are six more parents who have pleaded guilty and await sentencing. Fifteen parents, like actress Lori Loughlin and Mossimo Giannulli, pleaded not guilty and await trial.