College admissions scandal: Real estate exec allegedly used Facebook shares for UCLA bribe
This post has been updated.
On March 12, the FBI charged 46 people in what a law enforcement agent referred to as “the largest college admissions scam ever prosecuted by the Department of Justice.”
Wealthy parents allegedly used illegal means of securing their children’s admissions into elite universities through means such as bribing coaches to identify their children as recruits, using shares of popular stocks as bribes to nonprofits, and cheating on entrance exams.
Several high-profile names were among those in the official complaint, including actresses Lori Loughlin and Felicity Huffman. Other names include former PIMCO CEO Doug Hodge and commercial real estate investor Bruce Isackson, who allegedly leveraged Facebook (FB) stock to ensure that one of his daughters got into UCLA.
“If they get into the meat and potatoes” of what occurred, Isackson allegedly said, it could be “the front page story... The embarrassment to everyone in the communities. Oh my God, it would just be -- yeah. Ugh.”
In a phone call with Yahoo Finance, a spokeswoman for Isackson’s firm declined to comment
‘I … will make sure she has registered with the NCAA’
According to the affidavit in support of the criminal complaint, the non-profit tax-exempt corporation Key Worldwide Foundation (KWF) was the recipient of more than $250,000 worth of Facebook shares. Authorities state that the primary cooperating witness — known as CW-1 — “founded and, together with others, operated” KWF along with a for-profit college counseling and preparation business called The Key.
CW-1 told authorities that between 2015-2016, Isackson and his wife, Davina, sought to secure their older daughter’s admission to USC, initially, and then UCLA as a soccer recruit through bribery.
“On or about May 20, 2016, Ali Khosroshahin, the former head coach of women’s soccer at USC, forwarded the falsified soccer profile, ACT score and transcripts on CW-1’s behalf to Jorge Salcedo, the head coach of UCLA men’s soccer,” according to the affidavit. Khosroshahin noted: “I … will make sure she has registered with the NCAA.”
The daughter’s admission was provisionally approved the following month.
In July 2016, CW-1 “directed a payment of $100,000 from one of the KWF charitable accounts to a sports marketing company controlled by Salcedo,” according to the affidavit, as well as $25,000 to Khosroshahin.
2,150 Facebook shares
Steven Masera, CW-1’s bookkeeper, then sent Davina Isackson a $250,000 invoice from KWF. Bruce responded: “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 $250,000.000”?
The complaint alleged that once the Isacksons received confirmation, Isackson transferred 2,150 Facebook shares worth $251,249 to KWF.
Isackson received a letter one week later that acknowledged the purported charitable contribution and stated: “Your generosity will allow us to move forward with our plans to provide educational and self-enrichment programs to disadvantaged youth.” The letter also falsely indicated that “no goods or services were exchanged for the money.”
The affidavit also alleged that the Isacksons were involved in a similar scheme for their younger daughter to gain admissions into the University of Southern California “as a purported rowing recruit, even though she was not competitive in rowing, but instead was an avid equestrian.”
Salcedo and Khosroshahin have both been charged with conspiracy to commit racketeering. The Isackson parents have been charged with conspiracy to commit mail fraud and honest services mail fraud.
“We’re not talking about donating a building so that a school’s more likely to take your son or daughter,” U.S. Attorney for the District of Massachusetts Andrew Lelling said. “We’re talking about deception and fraud.”
Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.
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