In an interview with Yahoo Finance on Tuesday, former U.S. Attorney Preet Bharara weighed in on the indictment of wealthy parents accused of buying admission to universities like Yale, Stanford, and the University of Southern California.
“It takes a lot for a legal story to break through to the public, and the only two that I can think of in recent times are this case [the college admissions scandal] and the Jussie Smollett case,” Bharara told Yahoo Finance.
Dubbed “Operation Varsity Blues,” the admissions scandal ensnared 33 wealthy parents ranging from high-profile celebrities like Lori Loughlin and Felicity Huffman to business executives like former PIMCO CEO Douglas Hodge. On Tuesday, federal prosecutors hit 16 of the parents with new money laundering charges.
The other case Bharara referenced involved Smollett, a star on the hit TV show “Empire,” who told police that he was brutally assaulted in Chicago. He was then accused of staging the alleged hate crime against himself. But in a turn of events, all 16 charges were abruptly dropped.
Bharara, former U.S. Attorney for the Southern District of New York, likened the college admissions scheme to insider trading in an interview with Yahoo Finance.
“This case has broken through because everyone can identify with it. Everyone has thought about college or knows someone who went to college or is thinking about higher education for an offspring or someone else,” said Bharara.
“And they think, ‘Well, I do it by the rules.’ And you kind of understood that there was a way that privileged people had some advantage. It’s not that different from insider trading, by the way, when you charge a billionaire who says, ‘Well, why would I cheat...I have a billion dollars?’ Well, they have and they do. And that's true of some people like this too.”
‘It’s garden variety criminal law enforcement’
Bharara, who prosecuted close to 100 Wall Street executives for crimes like insider trading and money laundering fraud during his nearly eight years as U.S. attorney, pointed out the fascinating way the investigation first started — a finance executive named Morrie Tobin was being investigated for a pump-and-dump investment scheme. He then offered a tip about the head women’s soccer coach at Yale who would give his daughter admission in exchange for a bribe.
“No one is complaining, with respect to the college admissions scandal, that that began as a securities fraud investigation with respect to a particular person. That person got pinched and said, ‘You know what, have I got some information for you?’”
“And the only reason you have the [college admissions case] is because that person flipped and then turned on the authorities to this college admissions scandal and no one's complaining and saying, ‘Wait, it’s supposed to be about collusion. What are you doing here? That's the thing that happens all the time. It's ordinary. It's garden variety criminal law enforcement,” he added.
Bharara, the author of “Doing Justice: A Prosecutor's Thoughts on Crime, Punishment, and the Rule of Law,” was famously fired after refusing to comply with a Trump administration order to resign.
Now a distinguished scholar in residence and adjunct professor of law, Bharara is also a senior legal analyst at CNN, hosts two podcasts and is at the helm of several task forces that make recommendations to Congress.
“I consider that to be a form of public service without being employed by the government. Taxpayers don't fund me anymore.... There are lots of people who are not lawyers, and they're concerned about the country. They're concerned about what's happening in Washington, the concern about institutions being denigrated. They're concerned about the rule of law, and I think they're right to be concerned about those things.
“Every time I turn on the TV, there's another person used to work for me who's on TV explaining to the public what a grand jury is and how fairness is accomplished and how the rule of law is maybe at risk and we should think more deeply about those things. I like doing that and will do that for a while longer,” he said.
He has no plans to join a corporate law firm, investment bank, or tech company in the foreseeable future.
Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm. She hosts Breakouts, a monthly interview series for Yahoo Finance featuring up-close and intimate conversations with today’s most innovative business leaders.
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