How Silicon Valley became epicenter of college-entry cheating scandal

San Jose Mercury News (CA)

March 13-- Mar. 13--They make their fortunes in Bay Area real estate and private equity. They dress up for big charity galas, own horses and Napa wineries.

One is the wife of a former San Francisco 49ers football player. Another is a radiation oncologist at San Jose's O'Connor Hospital and the Palo Alto VA. A third is lauded for his ethical investments.

And, according to an indictment unsealed Tuesday, they were willing to pay almost anything to get their children into the country's most elite universities.

It didn't take long for the Bay Area to find itself at the epicenter of one of the largest college-entry cheating scandals in U.S. history.

Bribery. Deception. Faked athletic profiles. Paid-off proctors. Cheating on the SAT.

Along with the astonishing details, one by one, the names and secrets surfaced of more than a dozen Northern California parents accused of consorting with a fraudulent college counselor.

In phone calls recorded by the FBI, their conversations with the head of the corrupt scheme expose their audacity, their privilege -- and their fears.

"You know, I am so paranoid. ... I don't like talking about it on the phone, you know," Bruce Isackson, the president of Woodside-based real estate company WP Investments, said in the recorded message after allegedly paying $500,000, including $250,000 in Facebook stock, to buy his daughters' way into UCLA and USC. "If they get into the meat and potatoes, is this gonna be ... the front page story?"

The list includes Bill McGlashan, one of Silicon Valley's most prominent private equity investors, who is celebrated in tech circles as a well-known proponent of ethical investing. His $2 billion "social impact" fund supports such international projects as protecting wildlife in Botswana.

On a secretly recorded call, he discussed using Photoshop to make a fake profile for his son as a football player in order to help him get into USC or Stanford.

The man in the middle of the scheme is William Rick Singer, who authorities say set up a sham college counseling and prep firm as well as a bogus charity called the Key Worldwide Foundation to funnel parents' payoffs into bribes sent to university coaches and officials who held open coveted admissions spots for Singer's clients.

Singer even used Silicon Valley's blind ambition as part of his sales pitch.

"What we do is we help the wealthiest families in the U.S. get their kids into school. Every year there are -- is a group of families, especially where I am right now in the Bay Area, Palo Alto, I just flew in," he said in a recorded call with an East Coast family, according to court documents. "They want guarantees, they want this thing done. They don't want to be messing around with this thing. And so they want in at certain schools."

Many of the students had no idea of their parents' skulduggery. "He can never know," Marcie Palatella, the owner of a liquor distribution company and wife of former 49ers player Lou Palatella, told Singer in an email after allegedly paying $475,000 to his bogus charitable foundation to get her son into USC.

The accused also include Palo Alto oncologist Gregory Colburn and his wife, Amy, who allegedly paid $25,000 in cash and stock to have someone else take their son's college admission test. And Marjorie Klapper, a Menlo Park jewelry business owner, is accused of paying $15,000 in November 2017 to participate in the college entrance exam cheating scheme on behalf of her son.

Peter Jan Sartorio, a Menlo Park packaged-food entrepreneur, allegedly participated in the cheating scheme by paying $15,000 in cash in June 2017 to have a proctor oversee his daughter's ACT exam and correct her answers at a West Hollywood test center.

In another case outlined in the indictment, Hercules Capital private equity founder Manuel Henriquez and his wife, Elizabeth, of Atherton allegedly paid $400,000 to an intermediary to bribe the Georgetown University head tennis coach to "recruit" their oldest daughter to a team she would never join. "At her best, she appears to have ranked 207th in Northern California in the under-12 girls division," court documents noted.

To those in the world of college admissions, it comes as little surprise that so many on the list come from the status-flaunting pressure cooker of Silicon Valley -- where Ivy League stickers adorn Teslas racing up Interstate 280 and executives not only tout their good deeds on Facebook, but post their children's college acceptance letters.

"So very excited my daughter Charlotte will be attending USC next year #fighton #trojanfamily," Marin County entrepreneur, investor and former school district trustee Todd Blake tweeted last March, along with a picture of the crimson-colored acceptance packet. Authorities say he paid $200,000 to a sham charity that funneled the bribes and $50,000 to the USC Women's Athletics department to get their daughter into that school.

In the Bay Area, in particular, a child's college acceptances can be seen as a reflection of parenting, college counselors say, and feed the parents' egos both personally and professionally.

"I don't think it has to do with education. It has to do with social standing," said Barbara Austin, a private college counselor at College Quest with many South Bay clients. "We call Stanford, Yale, Harvard 'the golden key.' You get in them, you have the golden key to do anything."

On the other end of the scheme, the indictment said, were college athletics coaches from USC, Stanford, UCLA, Georgetown and other schools willing to set aside coveted admission spots for Singer's clients with fabricated athletic achievements. Stanford head sailing coach John Vandemoer accepted more than $200,000 in payments to the program to offer space to students with little or no sailing experience. USC Women's Athletic Director Donna Heinel also took bribes to "recruit" students, according to the indictment.

Agustin Huneeus from San Francisco, whose father founded Napa's Quintessa winery in Rutherford Valley, "sought reassurance that his $50,000 payment to Heinel would be returned if his daughter was not admitted to USC," the court documents say.

Heinel was to recruit his daughter as a water polo player, the indictment says.

"You understand that (my daughter) is not worthy to be on the team," Huneeus told Singer. At another point, he says, "but I just want to confirm. She actually won't really be part of the water polo team, right?"

"No, no," Singer says. "She doesn't have to do anything."

At one point, Huneeus complained that the person who sat in the SAT exam in place of his daughter earned only 1380 out of a possible 1600, which was in the 96th percentile nationally.

"If you had wanted to, I mean, (my daughter's) score could have been 1550, right?" Huneeus asked Singer.

"No," Singer responded, "'cause I would have got investigated for sure based on her grades."

From the indictment, it's clear some tried to shield their children from their manipulations, while others made them complicit.

After McGlashan arranged for a proctor to take his son's ACT test, which resulted in a score of 34 out of 36, he tried to arrange a similar scam for his two younger children.

"Here's the only question, does he know? Is there a way to do it in a way that he doesn't know that happened?" McGlashan asked about his son.

"Oh yeah," Singer responded.

The Henriquezes of Atherton, however, seemed to have few qualms of drawing in their daughters' participation. In 2015, after paying upward of $25,000 to arrange for a proctor to sit next to one of their daughters during her SAT exam at a private Belmont high school and feed her the answers, the young man "gloated with" Elizabeth Henriquez and her daughter "about the fact that they had cheated and gotten away with it," according to the indictment.

When Singer started working with federal agents to ensnare his former clients, he contacted Elizabeth Henriquez to go over their "story" that "you gave your money to our foundation to help underserved kids."

"Of course," she replied on tape, adding in a droll twist, "Those kids have to go to school."

___

Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com

Distributed by Tribune Content Agency, LLC.