Overview
On March 12, 2019, federal prosecutors indicted more than 50 individuals in what prosecutors called "the largest college admittance scam ever charged by the Department of Justice."[1] Fourteen months later, actress Lori Loughlin and her husband, Mossimo Giannulli, agreed to plead guilty to one count of conspiracy to commit mail and wire fraud and honest services mail and wire fraud, becoming the 32nd and 33rd individuals to plead guilty in the case. The couple's decision followed US District Court Judge Nathaniel M. Gorton's denial of their motion to dismiss all charges two weeks prior.[2]
The Plea Agreements
Under the terms of Loughlin's plea agreement, she would serve two months in prison, two years of supervised release, pay a $150,000 fine, and complete 100 hours of community service.[3] Under the terms of Giannulli's plea agreement, he would serve five months in prison, two years of supervised release, pay a $250,000 fine, and complete 250 hours of community service.[4] From his chambers, Judge Gorton signaled that he would not accept the guilty pleas until he received detailed pre-sentencing reports from probation officials.[5]
Loughlin and Giannulli File Motion to Dismiss
On March 25, 2020, Loughlin and Giannulli filed a motion to dismiss after the government produced exculpatory iPhone notes written on October 2, 2018 by co-conspirator William "Rick" Singer.[6] Singer's October 2 notes stated that government agents strong-armed him and instructed him to lie by telling parents their payments were bribes to university coaches and administrators; contrary to his previous statements that their payments were legitimate donations to universities and athletic programs.[7] The government reviewed Singer's notes in late October 2018, but did not produce the notes to the defense until February 26, 2020 – 16 months after it became aware of them.[8]
Loughlin argued that Singer's October 2 notes demonstrated that the government committed egregious investigatory misconduct by coercing Singer into lying and fabricating evidence.[9] Loughlin further argued that the existence of the notes, coupled with the government's failure to produce the notes in compliance with its Brady obligations, required dismissal of the indictment or, in the alternative, suppression of the consensual recordings of Singer's telephone calls with parents.
Investigatory Misconduct Allegation
The government represented that it did not instruct Singer to lie, but rather sought to have Singer corroborate "substantial evidence" it had already elicited regarding the defendants' intent to commit fraud.[10] The government also noted that it did not investigate Singer's notes because the assistant US attorney (AUSA) assigned to the case (1) knew that Singer was an unwilling cooperator, who had subsequently obstructed the investigation; (2) understood, based upon the evidence in the case, that the purpose of the calls was to offer those parents an opportunity either to confirm or deny their participation in the scheme; and (3) knew that statements made on the subsequent calls corroborated other evidence in the case.[11]
Noting that the government misconduct doctrine "must be invoked sparingly and only in truly exceptional circumstances," and that the doctrine has never been enforced in the First Circuit, the court concluded that the government did not engage in investigatory misconduct because the notes were (1) made before Singer was fully cooperative with the government, (2) related (primarily) to a sting operation involving parents not yet committed to Singer's "program," and (3) made in response to the agents' efforts to get Singer to corroborate, not fabricate, evidence.[12] Additionally, the court noted that inconsistencies between Singer's representations to parents before and after his October 2 notes is an issue "squarely for the jury after a trial on the merits."[13]
Failure to Timely Disclose Allegation
The government acknowledged it failed to timely disclose the existence of Singer's iPhone notes, and represented that it believed, based on its initial review in 2018, that Singer's notes were prepared for Singer's attorney, and therefore, subject to the attorney-client privilege.[14]
Setting aside the government’s understanding of attorney-client privilege, the court flatly stated that the government's failure to disclose the notes before February 26, 2020 was "irresponsible" and "misguided," and the result of "imprudent underestimation of the context, relevance and potential exculpatory nature of the notes." However, the court found that the government's untimely disclosure was not willful, and that the defendants were not unduly prejudiced by the late disclosure because the notes were disclosed more than eight months before the scheduled trial and before defendants' deadline for filing dispositive motions.[15] As a result, the court held that the government's untimely disclosure did not warrant dismissal of the indictment.[16]
Suppression of Consensual Recordings
Finally, the court concluded the defendants' proposed alternative remedy of suppression of the consensual recordings was not warranted. Although the court acknowledged that it had the inherent supervisory authority to suppress evidence in criminal cases if the evidence is the "product of or tainted by extreme conduct," it held that suppression was not appropriate because no investigatory misconduct occurred and the government's failure to disclose the notes in a timely fashion did not unduly prejudice the defendants.[17]
Conclusion
Although Judge Gorton's ruling was not entirely unexpected, the prospect of having to explain Singer's notes to a jury likely had a tempering effect on the government's plea discussions with Loughlin and Giannuli, and could lead to further plea deals with the 19 remaining defendants in the coming months. Sentencing for Loughlin and Giannulli is set for August 21, 2020.[18] The first Varsity Blues trial (involving defendants Gamal Abdelaziz, Diane Blake, Todd Blake, John Wilson, Homayoun Zadeh, and Robert Zangrillo) is set for jury selection on September 29, 2020 and opening arguments on October 5.
On June 2, the US Attorney's office in Boston announced Peter Dameris, former technology executive, pleaded guilty to one count of conspiracy to commit mail fraud and honest services mail fraud for paying $300,000 to bribe his son's way into Georgetown University as a tennis recruit. Steptoe will continue to monitor and provide updates regarding developments in this matter.
[1] See Jennifer Medina et al., Actresses, Business Leaders and Other Wealthy Parents Charged in U.S. College Entry Fraud, The New York Times (Mar. 12, 2019), https://www.nytimes.com/2019/03/12/us/college-admissions-cheating-scandal.html.
[2] See Mem. and Order, United States v. Sidoo et al., No. 19-100080-NMG (D. Mass. May 8, 2020), ECF No. 1169; see also Stewart Bishop, 'Varsity Blues' Parents Lose Bid to Dismiss Charges, Law360 (May 8, 2020, 6:25 PM), https://www.law360.com/massachusetts/articles/1271910/-varsity-blues-parents-lose-bid-to-dismiss-charges.
[3] See Loughlin Plea Agreement at 4, United States v. Sidoo et al., No. 19-100080-NMG (D. Mass. May 21, 2020), ECF No. 1217.
[4] See Giannulli Plea Agreement at 4, United States v. Sidoo et al., No. 19-100080-NMG (D. Mass. May 21, 2020), ECF 1218.
[5] See Joel Rubin, Actress Lori Loughlin and her husband enter guilty pleas in college admissions scandal, LA Times (May 22, 2020, 10:30 AM), https://www.latimes.com/california/story/2020-05-22/lori-loughlin-enters-guilty-plea-in-admissions-scandal.
[6] See e.g., Mem. Def.'s Mot. to Dismiss, United States v. Sidoo et al., No. 19-100080-NMG (D. Mass. Mar. 25, 2020), ECF 972.
[7] Mem. and Order, Sidoo et al., No. 19-100080-NMG, at 2, 5.
[8] Id. at 3.
[9] Id. at 1.
[10] Mem. and Order, Sidoo et al., No. 19-100080-NMG, at 5.
[11] Id. at 6.
[12] Id. at 7.
[13] Id. at 7-8.
[14] Id. at 8.
[15] Id. at 8-9.
[16] Id. at 9.
[17] Id. at 10.
[18] See Amended Procedural Order Re: Sentencing Hearing at 3, United States v. Sidoo et al., No. 19-100080-NMG (D. Mass. May 27, 2020), ECF 1230.
