Federal Judge Sentences Financier to Six Months in Varsity Blues Scandal

On July 29, 2020, US District Judge Nathaniel M. Gorton sentenced Hercules Capital, Inc. Founder Manuel Henriquez to six months in prison for his part in the “Varsity Blues” college admissions scheme.[1] In addition to the six-month term, Judge Gorton also ordered Henriquez to complete 200 hours of community service and pay a $200,000 fine.[2] Henriquez’s sentence is one month less than that of his wife, Elizabeth Henriquez, who received a seven-month sentence on March 31, 2020.[3] Manuel Henriquez, who pled guilty on October 21, 2019,[4] is the 16^th parent sentenced, and the last of four parents federal prosecutors dubbed “the most culpable parents charged.”[5] Manuel Henriquez’s Conduct Prosecutors alleged Henriquez and his wife paid William “Rick” Singer nearly $50,000 to facilitate cheating on their two children’s college entrance exams.[6] According to prosecutors, the Henriquezes cheated on more standardized test than any other co-conspirator: twice for their oldest daughter and three times for their youngest daughter.[7] Prosecutors also alleged that the Henriquezes paid Singer $400,000 in bribes to get their oldest daughter into Georgetown as a fake tennis recruit in 2016, and that Manuel Henriquez agreed to use his position as a prominent alumnus and former Member of the corporation at Northeastern University to advocate for the admission of one of Singer’s other students.[8] Federal Prosecutors Revise Sentence Recommendation The government recommended that Henriquez receive an 18-month sentence, plus 250 hours of community service and a $150,000 fine in February 2020,[9] but later revised its recommendation seven days before Henriquez’s sentencing hearing.[10] Although the government initially argued that an 18-month sentence was warranted because Henriquez, in part, repeatedly engaged in serious criminal conduct, actively participated in the scheme, and permitted his children to become complicit in his crime,[11] the government later determined that its initial recommendation did not “comport with sentences imposed by [Judge Gorton] on similarly situated defendants and plea agreements the government [] entered into . . . with other defendants who have not yet been sentenced.”[12] In a July 22, 2020 Supplemental Sentencing Memorandum submitted to Judge Gorton, federal prosecutors noted that Judge Gorton imposed sentences of five, nine and seven months for Michelle Janavs, Douglas Hodge, and Elizabeth Henriquez[13] – the only other parents convicted of conspiracy to commit money laundering and conspiracy to commit the underlying fraud.[14] The Government also noted that it had entered into plea agreements with Lori Loughlin, Mossimo Giannulli, and David Sidoo, and that Loughlin, Giannulli and Sidoo agreed to prison terms of two months, five months, and three months, respectively.[15] In its Supplemental Sentencing Memorandum, the government reasoned that Henriquez’s conduct was less culpable than Elizabeth Henriquez (seven-month sentence) and Hodge (nine-month sentence) because Henriquez, unlike Hodge, did not pursue the “side door” bribery with Singer; and because Henriquez, unlike his wife, was “a less active participant in the mechanics of the fraud.”[16] Conversely, the government reasoned that Henriquez was more culpable than Loughlin (two -month sentence) and Sidoo (three-month sentence) because Henriquez pursued the scheme more times than Sidoo, and was more active in the scheme’s execution than Loughlin.[17] Accordingly, the government concluded that Henriquez’s culpable conduct warranted a five-month sentence because “such a sentence recognize[d] the seriousness of Henriquez’s criminal conduct, while avoiding unwarranted sentencing disparities with similarly situated co-defendants.”[18] Conclusion Somewhat unexpectedly, Judge Gorton ultimately sentenced Henriquez to a six-month term – one month more than the government requested. Judge Gorton made sure to note that he would have sentenced Henriquez to more than a year in prison had Henriquez not exhibited a long-standing commitment to charity, nor articulated his acceptance of responsibility to the court. Judge Gorton’s pointed statement suggests he is unlikely to consider sentencing disparities among similarly situated co-defendants in his final determination, despite the government’s willingness to revise its sentence recommendations to avoid “unwarranted” sentencing disparities. Manuel Henriquez is scheduled to report to prison in late February 2021, four weeks after his wife, Elizabeth Henriquez, completes her own seven-month sentence.[19] The first Varsity Blues trial (involving defendants Gamal Abdelaziz, John Wilson, Homayoun Zadeh, and Robert Zangrillo) is still set for jury selection on September 29, 2020 and opening arguments on October 5. Steptoe will continue to monitor and provide updates regarding developments in this matter. [1] See Brian Dowling, ‘Hypocrite’ Financier Gets 6 Months In ‘Varsity Blues’ Scheme, Law360 (July 29, 2020, 6:49 PM), https://www.law360.com/articles/1296511. [2] Id. [3] Sentencing Judgment at 1, United States v. Henriquez, No. 19-10080-NMG (D. Mass. Apr. 7, 2020), ECF No. 1069. [4] Amended Procedural Order Re: Sentencing Hearing at 1, United States v. Henriquez, No. 19-10080-NMG (D. Mass. Oct. 21, 2019), ECF No. 598. [5] Gov’t Consol. Sentencing Mem. at 1, United States v. Henriquez et al., No. 19-10080-NMG (D. Mass. Feb. 3, 2020), ECF No. 816. [6] Id. at 10. [7] Id. [8] Id. [9] Id. at 18. [10] Gov’t Supplemental Sentencing Mem., United States v. Henriquez, No. 19-10080-NMG (D. Mass. July 22, 2020), ECF No. 1418. [11] Gov’t Consol. Sentencing Mem., Henriquez et al., No. 19-10080-NMG, at 18. [12] Gov’t Supplemental Sentencing Mem., Henriquez, No. 19-10080-NMG, at 1. [13] Id. at 2. [14] Gov’t Consol. Sentencing Mem., Henriquez et al., No. 19-10080-NMG, at 2. [15] Gov’t Supplemental Sentencing Mem., Henriquez, No. 19-10080-NMG, at 2. [16] Id. at 3. [17] Id. [18] Id. at 2. [19] Id.