Ex-TPG Leader McGlashan Among 16 Indicted in College Scandal

(Bloomberg) -- Sixteen parents in the U.S. college cheating scandal, including former TPG managing partner Bill McGlashan and actor Lori Loughlin, were indicted by a federal grand jury as prosecutors aggressively pursue the biggest admissions scam they have ever taken on.

The indictments come on the heels of 13 parents -- including Gordon Caplan, the former co-chair of Willkie Farr & Gallagher, and actor Felicity Huffman -- agreeing to plead guilty. The U.S. is taking a hard line with the 33 parents swept up in the scandal, swiftly wresting admissions from those looking for deals to reduce their punishment and raising the stakes for those who balk.

The 16 parents now face two charges -- one count of conspiracy to commit fraud and a new count of money laundering conspiracy. With their indictment, they will be required to appear in federal court in Boston in coming days to enter a plea. The judge may also set a trial date.

“The prosecutor’s case against Mr. McGlashan is deeply flawed and ignores important exculpatory facts,” his lawyer said in a statement. “We look forward to presenting his side of the story.”

The U.S. accuses the parents in the case of conspiring with college counselor and admitted ringleader William Rick Singer to shower $25 million in bribes on entrance exam administrators, a surrogate test taker and corrupt university sports coaches in order to get their children into Yale, Georgetown, Stanford and other exclusive schools.

Financial Advisers

Prosecutors have said the investigation continues. A revised criminal complaint against two of the 13 parents pleading guilty suggests a new avenue of inquiry for the government -- tax and financial advisers who may have helped conceal bribes as charitable donations.

Two of those planning to plead guilty are Bruce and Davina Isackson. The first parents identified as cooperating in the investigation, the Isacksons are accused of paying $600,000 to participate in the exam-cheating plot for their younger daughter and a college recruitment scheme for both of their daughters. In the recruitment plot, they are alleged to have funneled bribes to coaches to win the girls’ admission as recruited athletes.

Under the terms of his plea, Bruce Isackson faces between 37 and 46 months behind bars under federal sentencing guidelines, although his cooperation may win him significant leniency. It isn’t clear what new evidence the Isacksons can give federal investigators, but the revised complaint against them may hold a clue. The government added a tax conspiracy charge against Bruce Isackson, saying he and “others known and unknown to the United States Attorney” helped prepare fraudulent returns.

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