Prosecutors Get Tough With Parents in College Scandal

the college admission scandal. They're quickly wrapping up guilty please from thirteen parents who are looking to reduce their punishment and raising the stakes for sixteen parents who held out by indicting them and adding a money laundering charge to the conspiracy charge. Joining me is former federal prosecutor George Newhouse of Theodora Oranger. So, George, all the parents were arrested last month, most on a criminal complaints, So essentially

a statement of facts and indictment is more serious. Does that suggest anything to you, Well, the reason they went with a criminal complaint, June, is that the an indictment takes a lot more time. It takes time to present it to the grand jury. They clearly had timing issues because of course they wanted to time the announcement of this big investigation within weeks of all the admissions occurring at all these elite schools, So that's why they went

with a complaint. Then, of course what they do is they approach all of the defendants. And you said twenty nine or thirty, I mean there are probably another fifty or so in the winds, and presumably those investigations are continuing. So they go to the parents and they say, here's the deal. You complete to this, and if you don't,

by the way, there are other charges out there. They could be looking at a charge of Jack Sprauds for contributing to this five o n C three not for profit charity that was not in any way involved in charitable activities. So the bottom line is it's a it's a pressure ploy. It is designed to induce quick turnaround, guilty please, and that is what makes the life simple for US attorneys. So money laundering charges, you automatically think

about crime syndicates, asset for warfeiture. Is this a bit of prosecutorial overreach just to put pressure on these parents? An excellent question. June and I have criticized this the charging decisions that have been made. It is not money laundering, certainly not what Congress intended by money laundring, and of course the parents were all charged with conspiracy to commit RICO violations that the Racketeer, Influence and Corrupt Organizations Act

passed in the sixties to combat actual racketeering. We're talking about organized crime, narcotics conspiracies, not people who engage in commercial fraud. So I think the case has been overcharged. But the reason that prosecutors like to do that is it puts tremendous pressure on the individuals to waive their

constitutional rights and the plea guilty. You know, the question has been asked over and over about whether the parents will spend any time in prison, and at the beginning of this I thought no. But with all the publicity, there's pressure to make them an example. So is it possible that some of the these high powered, high profile parents will spend some time in prison? That really is the question. At this point can't be answered. But let's

there's no question these are extremely serious charges. It is a high profile case, and as you correctly point out, it means that the attention of the nation is directed to what is going this court. The nice thing about federal judges, I will say, and it's true for them all over the country. They don't really respond to pressure because politics doesn't involve them. So I'm confident to the judges who render these decisions will base it upon the unique facts of this case. I think a lot of

those parents are excellent candidates for straight probation. The judge will take into account the price they've already paid, the price with their children, the know the tremendous negative publicity, and the fact that most of these people take The former head of the New York law firm has already had lost his job. So there are many punishments and detriments that are imposed on people who sustained so many convictions. In prison is usually not the answer for these people.

Let's turn to the students. Some of the students were in on the scheme. It said that most of them weren't. Could any of those students be charged with a crime. Well, at a great point, if the students were knowingly involved in the making of false statements and knew that bribes were being paid on their behalf, in theory they would have aiding and abetting complicity, they could be charged potentially

in a conspiracy. But that's really I mean, that would be an example of overcharging that I think we're not going to see, so that's not going to happen. The prices students are paying as we're looking at what's occurring at the universities is that many of them are being expelled from university degrees being taken away. The colleges and universities which I think rightly feels that they're the victim

in these schemes, are taking this very seriously. You mentioned the possible tax charges and a revised criminal complaint against two of their parents pleading guilty suggests that new line of inquiry as well as the prosecutors saying this investigation isn't over. So what might they be looking into now, George, Well, again, particularly to the people that are not quickly coming to terms and pleading guilty, they could be looking at a

charge that's called a client conspiracy. It is a conspiracy to an impair and impede the functioning of the I R S and assessing taxes and collecting tax liabilities. And I can tell you one of the pet peeves of the I R S on the enforcement side are contributions to quote five oh one C three's that are not really charities and which give back value, and there is

undoubtedly billions of dollars in illicit deductions taken. I mean, this particular foundation was ironically set up to quote serve the underserved children, which of course it did quite the opposite. But yes, this I expect could be a priority for the I R S and could result in further charges. What might the parents who do decide to go to trial? What might their defense be? Wow, I have no idea, because there are tapes. It's not so much I didn't

do it. But the beautiful thing about capes and prosecutor's standpoint is there is no cross examining a tape recording. The words of the defendant are out there for everyone to hear, so there is no spin control. You'd have to be a high place politician in d C to be able to explain some of these statements, and of course then not credibly. So if they're on tape with Singer, which most of the early people are, they really have no choice. We'll have to leave it there, George. But

more to come on this, that's for sure. And thanks so much. That's former federal prosecutor George Newhouse of Theodore Oranger. Thanks for listening to the Bloomberg Law podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on bloomberg dot com slash podcasts. I'm June Grasso. This is Bloomberg, the dun of the name