A Hillsborough parent and the CEO of a California liquor distribution company has agreed to plead guilty to a conspiracy charge for fraudulently securing her son's admission to the University of Southern California.
Marci Palatella, 66, CEO of International Beverage in Burlingame and co-owner of Kentucky-based Preservation Distillery with her husband, former San Francisco 49ers linebacker Lou Palatella, plans to plead guilty to one count of conspiracy to commit honest services mail fraud, the U.S. Attorney's Office for the District of Massachusetts announced Tuesday. No date has been set for her sentencing hearing.
Palatella arranged with college placement test consultant William "Rick" Singer and others to pay $500,000 to get her son admitted to USC as a football recruit. He was not actually being considered and would not play for the university's football team, according to court charging documents.
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. She ultimately paid $500,000 to have her son represented as a purported football recruit to USC. She allegedly paid $100,000 to Donna Heinel, USC's senior associate athletic director at the time, who allegedly presented the boy's application to the university's athletic admissions subcommittee and obtained approval to admit him as a recruit, according to court documents.
Prosecutors contend Palatella also agreed during a 2018 phone call with Singer to mislead the IRS if anyone inquired about her payments to the foundation, according to the indictment. She faced charges of conspiracy to commit mail and wire fraud and honest services mail and wire fraud; conspiracy to commit federal programs bribery; and conspiracy to commit money laundering. Her trial was scheduled to begin on Sept. 13.
Palatella has agreed to a six-week prison sentence, a $250,000 fine and two years of supervised release, with a condition of home confinement for the first six months of her supervised release, and 500 hours of community service.
She will be the 33rd parent to plead guilty in a case that involved 57 people, including athletics coaches, admissions-test monitors and others who sought end runs around the college-acceptance process for their children. Wealthy parents paid Singer and his cohorts large sums of money to fix college admissions exams, such as the SAT and ACT, by having designated proctors who monitor the tests, correct their child's answers or take the tests on their child's behalf in order to boost their scores. A second part of the scam involved bribing athletics coaches and recruiters at prestigious colleges and universities in exchange for recruiting their child for sports teams so they could gain admission to the college or university.
Palatella was one of three Bay Area residents with Midpeninsula ties implicated in the scheme who had not taken plea deals. Palo Alto residents Amy and Gregory Colburn are scheduled for a jury trial on Jan. 13.
Eight other Bay Area residents with local connections have taken plea deals and were sentenced to punishments ranging from fines with no jail time to a few months in prison with hefty fines, include former Stanford University sailing coach John Vandemoer; Menlo Park residents Marjorie Klapper and Peter Jan Sartorio; Atherton residents Manuel Henriquez and Elizabeth Henriquez; and Napa vintner Agustin Huneeus Jr.
Hillsborough residents Bruce and Davina Isackson have pleaded guilty and are scheduled for sentencing on Jan. 28.