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Miami and Los Angeles developers indicted in major college admissions fraud scheme
33 wealthy parents were charged, including actresses Felicity Huffman and Lori Loughlin
Three real estate developers and investors were among the 33 parents indicted in the Justice Department’s largest-ever college admissions investigation, which federal prosecutors revealed Tuesday.
Miami developer Robert Zangrillo and Los Angeles developers Bruce Isackson of WP Investments and Robert Flaxman of Crown Realty were charged in the scandal, which involved parents allegedly paying bribes to secure their children acceptance into elite schools including Stanford, Georgetown and Yale.
Actresses Felicity Huffman and Lori Loughlin and William E. McGlashan Jr., a partner at the private equity firm TPG, were also among the wealthy parents who were charged by the Department of Justice.
An FBI investigation found that the parents conspired to bribe SAT and ACT exam administrators to allow students to cheat on their college entrance exams, as well as paid off varsity coaches and administrators who could facilitate their kids getting accepted to those universities. A number of parents used charitable organizations to conceal the payments, according to the Justice Department.
The owner of a college admissions company, William Rick Singer, was charged with money laundering, obstruction of justice, racketeering and conspiracy to defraud the U.S. The parents paid Singer about $25 million between 2011 and February of this year, according to the indictment. He’s expected to plead guilty.
The case is the Department of Justice’s largest-ever prosecution of its kind, involving 200 agents, according to the New York Times. Fifty people in six states were charged.
Zangrillo, a main investor in the Magic City Innovation District project in Miami’s Little Haiti neighborhood, was charged with conspiracy to commit mail fraud and honest services mail fraud. According to the complaint, filed in the Southern District of Florida, Zangrillo paid off athletic department officials at the University of Southern California to designate his daughter as an athletic recruit, having someone take classes on her behalf. Zangrillo did not immediately respond to a request for comment.
He is said to have made two donations: $200,000 to the Key Worldwide Foundation and $50,000 to Women’s Athletics at USC. Though USC rejected his daughter’s application in 2017, the complaint states she was accepted after her second application, touting her rowing experience that was absent from the first application, was placed on a VIP list of transfers.
Zangrillo is founder and CEO of Dragon Global, a venture capital and real estate investment firm. In Miami, he’s co-developing the controversial $1 billion Magic City project along with Tony Cho and Plaza Equity Partners. The 17-acre development calls for a 30,000-square-foot Magic City Studios and a 15,000-square-foot innovation center with startups, co-working space and other collaborations; an office tower; retail space; workforce housing and possibly a hotel. It’s planned for land between Northeast 60th and 64th streets.
In the Los Angeles area, Isackson and his wife, Davina, were both indicted in the scheme for securing their daughter’s admission, also to USC, as a recruited athlete.
In an email in July 2016, Bruce Isackson wrote: “Thanks for the follow up call regarding the attached Key Worldwide Foundation invoice. Per our discussion can you please send me an email confirming that if [our daughter] is not admitted to UCLA as a freshman for the Fall 2016 class that The Key Worldwide Foundation will refund our $250,000.00 gift. Again, both Davina and I are greatly appreciative of all your efforts on [our daughter]’s behalf!”
Isackson is president of WP Investments, an industrial and office firm in Woodside, California. He could not immediately be reached for comment.
Beverly Hills developer Flaxman, president and CEO of Crown Realty, paid to get his son into the University of San Diego, according to the complaint. Flaxman’s company wired two payments of $125,000 each to the Key Worldwide Foundation in May and June of 2016.
The version of his son’s application that was ultimately accepted by USD in March 2016 said his son volunteered work managing an elite youth athletic team, according to the suit. Previous versions did not refer to the sport, according to the complaint. Flaxman is also said to have paid to get his daughter a higher ACT score.