The former CEO of a Palo Alto venture-capital firm and his wife changed their pleas to guilty on Monday in the largest college-admissions scam ever prosecuted by the U.S. Department of Justice, according to the U.S. Attorney's Office.
Manuel Henriquez, 55, the former CEO of venture capital and private equity firm Hercules Capital in Palo Alto, and Elizabeth Henriquez, 56, admitted in Massachusetts federal court to one count each of conspiracy to commit mail and wire fraud and honest services mail and wire fraud and conspiracy to commit money laundering. They previously pleaded not guilty in April.
The Henriquezes took part in the nationwide scam, dubbed "Operation Varsity Blues." They worked with college-admissions counselor William "Rick" Singer, 58, to bribe college-admissions-test proctors to cheat on their children's SAT and ACT college-entrance exams and bribed a tennis coach to help one of their daughters be admitted to a prestigious university under false pretenses, prosecutors said.
Thirty-three parents, including the Henriquezes, are among 50 people charged by federal prosecutors in March with taking part in the scheme.
The Henriquezes paid Singer $25,000 in 2015 to have proctor Mark Riddell fly from Florida to oversee their eldest daughter's SAT exam at a private college preparatory school in Belmont. Riddell provided the daughter with answers to the exam. Singer paid Riddell through Singer's nonprofit organization, The Key Worldwide Foundation, according to the federal complaint filed in March.
The couple paid Singer an additional $400,000 to help get the daughter into Georgetown University as a tennis recruit. Elizabeth Henriquez and her daughter sent a letter to tennis coach Gordon Ernst that misrepresented her tennis experience. The daughter also emailed her fraudulent SAT scores to Ernst, according to the complaint.
The Henriquezes also hired Singer in 2016 to have Riddell provide answers for the ACT exam to their younger daughter at a testing facility in Houston, Texas. They lied to her school guidance counselor, claiming they needed to move the test site because they would be in Houston at that time.
Singer paid his accomplices $70,000 for their roles in facilitating the falsified exam for the Henriquezes' younger daughter and another student. Manuel Henriquez agreed to help Singer secure the admission of an applicant to Northeastern University in Boston, Massachusetts instead of paying for the cheating on the younger daughter's ACT exam. The couple also paid Singer $25,000 in cash to facilitate cheating for the younger daughter in the SAT exam in 2017, according to the complaint.
Elizabeth Henriquez will be sentenced on Feb. 7, 2020, and Manuel Henriquez will face sentencing on March 5, 2020. The prosecution's recommendation for sentencing has not yet been released.
The charges each carry a maximum sentence of 20 years in prison and fines totaling up to $750,000.
The Henriquezes are the first parents to switch their pleas. On April 29, Mill Valley resident William McGlashan, 55, formerly of Palo Alto, and Marci Palatella, 56, of Hillsborough also pleaded not guilty to conspiracy to commit mail fraud and honest services mail fraud and money laundering conspiracy.
Palo Alto residents Amy Colburn, 59, and Gregory Colburn, 61, filed motions to dismiss their cases on April 15. They are each charged with conspiracy to commit mail fraud and honest services mail fraud and money laundering conspiracy.
Eight other parents who faced conspiracy to commit mail fraud and honest services mail fraud charges have received prison sentences ranging from no prison time to five months, among them two local parents. Peter Jan Sartorio, 53, of Menlo Park, was sentenced on Oct. 11 to one year of probation, 250 hours of community service and a $9,500 fine for his role in the scandal. Menlo Park resident Marjorie Klapper, 50, on Oct. 16 received a three-week prison sentence, one year of supervised release and 250 hours of community service.
Hollywood actress Felicity Huffman, 56, received a two-week sentence and a $30,000 fine (media reports indicate she began serving her sentence at the Federal Correctional Institution, a low-security facility in Dublin, on Oct. 15); Gregory Abbott, 68, a New York beverage business executive, and Marcia Abbott, 59, a former fashion editor at Family Circle, each received a one-month prison sentence and $45,000 fine; and Gordon Caplan, 53, a Connecticut attorney, received a month in prison and a $50,000 fine. All of their sentences include a year of supervised release and 250 hours of community service.
Napa vintner Agustin Huneeus Jr., 53, was sentenced to five months in prison and issued a $100,000 fine, two years of supervised release and 500 hours of community service; and Los Angeles business executive Devin Sloane, 53, received four months in prison, two years of supervised probation, 500 hours of community service and a $95,000 fine.
Former Stanford University head sailing coach John Vandemoer, 41, of Palo Alto, pleaded guilty on March 12 to conspiracy to commit racketeering after accepting $800,000 in bribes for athletics programs to place students on the sailing team. He was sentenced to one day of incarceration, which he already served prior to the court hearing; two years of supervised release, with the first six months to be served in home detention; and a $10,000 fine.
Davina Isackson, 55, of Hillsborough, pleaded guilty on May 1 to conspiracy to commit mail fraud and honest services mail fraud. Her husband, Bruce Isackson, 61, pleaded guilty to commit mail fraud and honest services mail fraud, money laundering conspiracy and conspiracy to defraud the United States.
Prosecutors are recommending incarceration at the lower end of sentencing guidelines for Davina Isackson, plus one year of supervised probation, a $100,000 fine and restitution or forfeiture. Bruce Isackson faces recommendations of incarceration at the lower end of sentencing guidelines, one year of supervised probation, a $150,000 fine and restitution of $139,509 to the Internal Revenue Service and forfeiture.
They are scheduled for sentencing on May 21, 2020.