News


Palatella, McGlashan plead not guilty in college bribery scam

Gregory and Amy Colburn of Palo Alto ask court to dismiss second indictment

Two Midpeninsula parents in the college-admissions bribery scandal pleaded not guilty to charges in the nationwide $25-million scandal while a Palo Alto couple has asked the federal court to dismiss the same charges against them in the case, according to court documents.

Marci Palatella, 63, of Hillsborough and former Palo Altan William McGlashan, 55, now of Mill Valley, filed a waiver to appear in federal court in Massachusetts. They also pleaded not guilty to charges of money laundering conspiracy and conspiracy to commit mail and wire fraud and honest services mail and wire fraud.

An attorney for Dr. Gregory Colburn, 61, and Amy Colburn, 59, of Palo Alto, filed a motion to dismiss the indictment on the grounds that it "fails to state an offense." The couple previously pleaded not guilty to the sames charges Palatella and McGlashan face on April 3.

The four locals are among 33 parents caught up in the nationwide $25-million scandal that accuses the parents of paying bribes to coaches at top-tier universities and colleges to portray their children as athletes for recruitment, to pay people to take college-admissions tests for their children to improve their scores or to have a test proctor to correct the answers after their child took the SAT or ACT tests for improved scores. The alleged scam was orchestrated by college preparatory counselor William "Rick" Singer of Newport Beach and others, according to federal prosecutors.

On April 8, 14 of the 33 parents filed papers with the court agreeing to plead guilty to related charges in the case, including Menlo Park residents Marjorie Klapper, 50 and Peter Jan Sartorius, 55; Hillsborough residents Bruce Isackson, 61, and Davina Isackson, 55; and actress Felicity Huffman, 56, of Los Angeles.

The Colburns' attorney David Schumacher claimed that prosecutors erred in pursuing conspiracy prosecutions, relying on a statute that casts too wide a net, which case law and some Supreme Court decisions have reined in, according to the motion. The court should dismiss the indictment against the Colburns because it doesn't allege sufficient facts or legal grounds to treat the Colburns as members of a single conspiracy that includes all of the other alleged co-conspirators, according to Schumacher.

The government's claim that the 19 parents who didn’t plead guilty are part of a single conspiracy doesn’t hold up because the parents didn’t know each other or had any interest in children outside of their own, according to the motion. The parents live in various cities and engaged in different fraudulent schemes and their activities were separated by years.

"The only thing the defendant parents have in common is their common relationship with William 'Rick' Singer, who the government alleges was at the center of the conspiracy," wrote Schumacher, a partner at the Boston law firm Hooper, Lundy & Bookman PC.

Citing a 1946 Supreme Court decision, Schumacher noted the justices had referred to a Court of Appeals analogy that thieves using a single "fence" to dispose of their loot do not become "confederates" and lumping all of the defendants into a single trial went too far.

Palatella allegedly wired $75,000 to The Key Worldwide Foundation, an organization Singer created to launder the bribes, for Florida resident Mark Riddell to proctor her son's SAT exam and to correct his answers in 2017. Palatella ultimately paid $500,000 to have her son represented as a purported football recruit to the University of Southern California. She allegedly paid $100,000 to Donna Heinel, USC's senior associate athletic director, who allegedly presented the boy's application to the university's subcommittee for athletic admissions and obtained approval to admit him as a recruit.

Palatella allegedly agreed during a 2018 phone call with Singer to mislead the Internal Revenue Service if anyone inquired about her payments to the foundation, according to the indictment.

McGlashan allegedly paid Singer $50,000 through the foundation to arrange for Riddell to proctor his son's ACT exam at a West Hollywood test center and to secretly correct the answers without the boy's knowledge, according to the grand jury indictment. Singer and Riddell used the southern California center frequently in their scheme after getting students transferred there through a fraud in which the parents claimed their children had learning disabilities and needed more time to take the exams. Singer funneled payments to Riddell and other conspirators through his foundation.

McGlashan also allegedly paid a total of $250,000 to Singer to facilitate his son's admission as a football recruit to USC by creating a fake football player profile for the boy and used Photoshop to place the son's head onto the body of a kicker, according to the indictment.

Each parent faces a maximum sentence of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater, for the conspiracy to commit mail and wire fraud and honest services mail and wire fraud. They each face a maximum sentence of 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the property involved if convicted on the money laundering charge.

Two other parents, Elizabeth Henriquez, 56, and Manuel Henriquez, 56, of Atherton, did not enter pleas Monday. Another indicted parent, actress Lori Loughlin, also entered a not-guilty plea.

Related content:

• Listen to the March 15 episode of "Behind the Headlines," where Palo Alto college adviser John Raftrey discusses the implications of the nationwide admissions bribery scandal, now available on our YouTube channel and podcast.

Pressure over college admissions 'out of control'

Stanford students file class action lawsuit in admissions scandal

Ex-global equity firm exec, a former Gunn High student, implicated in admissions scam

Opinion: Making the college-admissions system more equitable

Opinion: Close extra-time loophole on 'standardized' SAT/ACT tests

Opinion: Lessons parents should learn from the college-admissions scandal

Editorial: The audacity of privilege

$75K for a fake ACT score? Students say cheating happens without the big bucks

Following college-admissions indictments, feds investigate whether Stanford was lax in complying with financial-aid laws

Menlo Park father intends to plead guilty to an unspecified charge in college admissions scam

Locals among 14 defendants who plan to plead guilty in college-admissions bribery scam

Stanford expels student in connection with college-fraud scheme

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Comments

14 people like this
Posted by resident
a resident of Downtown North
on Apr 15, 2019 at 9:50 pm

They are obviously guilty. They are just trying to work out a plea deal on lesser charges to avoid serious prison time.


6 people like this
Posted by Observer
a resident of Old Palo Alto
on Apr 16, 2019 at 3:39 pm

How will they explain this recorded conversation as written i PA Online on 3/26/19:

On Oct. 24, 2018, Singer called the Colburns from Boston, Massachusetts. He told Amy Colburn the Internal Revenue Service had asked him about the payments for her son's March 10, 2018 SAT test in southern California at the West Hollywood Test Center, where Singer sent his clients' children to cheat on the college-admissions tests.

"OK, is that a problem?" Amy Colburn allegedly replied.

Singer said that he was not going to mention to the IRS that Mark Riddell, a Florida man Singer had brought in to "proctor" the exams, had taken the test for their son.

"Mmm-hmmm," Amy Colburn allegedly said.

Singer said he told the IRS that her payment "went to the foundation to help underserved kids."

"OK," Amy Colburn responded.

Singer also spoke to Gregory Colburn during that same phone call. He said that he was not telling the IRS that Riddell took the test for his son at the West Hollywood Test Center.


4 people like this
Posted by Annette
a resident of College Terrace
on Apr 16, 2019 at 3:40 pm

Annette is a registered user.

Felicity Huffman seems to have gotten better legal advice. And she is smart enough to have followed it. She's at least got a chance of salvaging her reputation and mending family relations. Throwing money around on a slick legal defense underscores the basic problem: some of the Singer people think money is the answer to everything. It is a helpful commodity, to be sure, but in this case it has caused nothing but trouble.


2 people like this
Posted by Guilty As Charged
a resident of Crescent Park
on Apr 17, 2019 at 8:55 am

(1) Pleading 'not guilty' will force & enable countless new hearings based on additional 'discovery', evidentiary depositions & petitions to dismiss.

(2) It will place the burden of proof on the prosecution possibly encouraging an agreed upon settlement of lesser sentencing (i.e. minimum jail time with fine).

(3) This is an expensive gamble as the defense attorneys will be racking up an extensive number of billable hours. Then again, the defendant's can probably afford the legal fees & if they go bankrupt in the process, do we really care?

(4) Pleading 'no contest' without admitting guilt is the rational approach but Hollywood types & fashion designers are not known for being rational. The same can also be said of those without moral or ethical compass.


10 people like this
Posted by resident
a resident of Downtown North
on Apr 17, 2019 at 11:00 am

Word on the street is that the Feds are pushing for prison time for all the perps. The ones pleading not guilty just haven't come to terms with that yet, but they're going to have to sooner or later.


2 people like this
Posted by TimH
a resident of Old Palo Alto
on Apr 18, 2019 at 8:27 am

Citing a 1946 Supreme Court decision which associates cases where "thieves using a single "fence" to dispose of their loot" is quite a stretch since the indictments appear to have been issued to individuals or couples, not to one united group of people. This legal misdirection wilts against the alleged proof already circulating in the media. "You didn't ask me about it the right way" doesn't change what happened and just seems to be a lie.


Like this comment
Posted by Mark Weiss
a resident of Downtown North
on Apr 18, 2019 at 1:09 pm

Mark Weiss is a registered user.

I’ve commented earlier that I knew Bill McGlashan slightly in Palo alto schools three different schools. And we were teammates at least once on the football team I found a picture in the yearbook but did not remember it otherwise But we do have one mutual friend still in addition to hundreds of former classmates.

And I would say the guy who managed $100 billion and probably made tens of millions for himself is a different guy than the one I played flag football with.
And I have no idea what it means to be “the 1%”.

But I would say this does not bother me that much other than Schadenfrude — German word for my pleasure at the suffering of someone else German word for my pleasure at the suffering of someone else. As I see it if someone “” sheets if that’s the word to get his son into a selective private school all that means is some other little brat will go be displaced as I see it if someone ““ sheets if that’s the word to get his son into a selective private school all that means is some other little brat will go be displaced. The bottom 5% of the exclusive schools are coin flips anyhow. So I don’t see how the Mcglashen hypothetical gain hurt any of us.
I think ironically this whole thing is an advertisement for the exclusive schools like Stanford now they can claim that there are in missions are 92% cleaner.

I would just surmise that mcglashan will spend $10-$20 million defending himself and keeping himself out of prison it’s his money he apparently earned it God bless.
Coincidentally He has hired my college classmate John Huestontwerk, to defend him —Hueston cut his teeth as a prosecutor and convicted Ken Lay of Enron.

Don’t bullshit a bullshitter. Let he who has not photoshopped juniors face onto the neighbors better football cast the first


Like this comment
Posted by Mark Weiss
a resident of Downtown North
on Apr 18, 2019 at 1:18 pm

Mark Weiss is a registered user.

I’ve commented earlier that I knew Bill McGlashan slightly in Palo alto schools, three different schools. And we were teammates at least once on the football team —I found a picture in the yearbook but did not remember it otherwise. But we do have one mutual friend still, in addition to hundreds of former fellow classmates.

And I would say the guy who managed $100 billion and probably made tens of millions for himself is a different guy than the one I played flag football with.
And I have no idea what it means to be “the 1%”.

But I would say this does not bother me that much other than Schadenfrude — German word for my pleasure at the suffering of someone else. As I see it if someone “cheats” —if that’s the word —to get his son into a selective private school all that means is some other little brat will go be displaced. The bottom 5% of the exclusive schools admissions are coin flips anyhow. So I don’t see how the Mcglashans hypothetical gain hurt any of us.
I think ironically this whole thing is an advertisement for the exclusive schools like Stanford —now they can claim that their admissions are 92% cleaner.

I would just surmise that mcglashan will spend $10-$20 million defending himself and keeping himself out of prison: it’s his money he apparently earned it; God bless.
Coincidentally, he has hired my college classmate John Hueston to defend him —Hueston cut his teeth as a prosecutor and convicted Ken Lay of Enron.

Don’t bullshit a bullshitter. Let he who has not photoshopped junior’s face onto their neighbors better football body cast the first


Like this comment
Posted by Mark Weiss
a resident of Downtown North
on Apr 18, 2019 at 1:18 pm

Mark Weiss is a registered user.

..twerk.


Like this comment
Posted by Will Chen
a resident of another community
on Apr 18, 2019 at 4:07 pm

The defendants who entered into a plea agreement are the smart ones. As a lawyer, I know that the U.S. Attorneys are incredibly tenacious at prosecuting tax fraud crimes and quite successful at securing a conviction.

If found guilty, those defendants are sure to serve time in a federal prison.


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