Douglas Hodge, the former chief executive of bond giant Pacific Investment Management Co., is scheduled to be sentenced Friday for his role in the sprawling college-admissions cheating scandal that has ensnared more than 50 parents, coaches and others.
Federal prosecutors say Mr. Hodge paid a total of $850,000 to the
- company and charity of the scheme’s ringleader, William “Rick” Singer, as well as to
- Georgetown’s former tennis coach and
- a University of Southern California account controlled by an administrator who was also charged in the case. His tab was the largest of any parent charged.William “Rick” Singer used his network to recruit parents and coaches, often by word of mouth from clients who used his legitimate college-counseling services and through more formal referrals by financial advisers and others.
Mr. Hodge pleaded guilty in October to charges of fraud conspiracy and money-laundering conspiracy and admitted to working with Mr. Singer over the course of more than a decade to slot four children into colleges as purported athletic recruits, even when they weren’t competitive players. He was in talks with Mr. Singer about a fifth child as well.
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Mr. Hodge apologized for his behavior in a letter to the judge ahead of his sentencing. “I have made serious mistakes in judgment, and, in the process I have violated the law. For these actions, I take full responsibility and I am truly sorry,” he wrote.
Prosecutors have asked for Mr. Hodge to be sentenced to two years in prison, three years of supervised release, a $200,000 fine and 300 hours of community service.
Mr. Hodge’s attorneys have asked for a prison term at the low end of the sentencing guideline range, which the probation office determined was between zero and six months, as well as supervised release and community service. They also requested the sentence be split between home detention and incarceration.
Thirteen parents have been sentenced so far, by three different judges. The longest prison term handed down was six months, by the same judge overseeing Mr. Hodge’s case.
The roots of the scandal stretch back to 2015, when SNC-Lavalin was charged by Canadian authorities with using bribes to secure business in Moammar Gaddafi’s Libya.
The Globe and Mail newspaper reported in February that Trudeau’s team “pressed” Wilson-Raybould to cut the firm a deal known as a deferred prosecution agreement.
These deals, which are used in several countries, allow firms to avoid criminal convictions if they admit wrongdoing, pay fines and commit to stricter compliance rules.
Trudeau has said his team did not “direct” Wilson-Raybould’s decision, but few have been satisfied by the response.
In a January cabinet shuffle, Wilson-Raybould was moved from the Ministry of Justice to Veterans Affairs. It was widely seen as a demotion.
The Globe and Mail published its report the next month. Wilson-Raybould resigned as minister of veterans affairs and hired a retired Supreme Court justice to represent her.
.. Wilson-Raybould testified before a parliamentary committee that 11 members of Trudeau’s team had pressured her — some resorting to “veiled threats” — to get her to cut a deal.
Then Philpott resigned from the cabinet in solidarity with Wilson-Raybould.
.. Trudeau appeared for a spell to have weathered the storm, but the scandal burst into view again last week when Wilson-Raybould went public with a recording of a December phone call with Canada’s then-top civil servant.
In the call, she warned Michael Wernick, then Canada’s clerk of the Privy Council, that Trudeau “was on dangerous ground.”
Some have questioned her decision to tape the call.
“I am angry, hurt, and frustrated because I feel and believe I was upholding the values that we all committed to. In giving the advice I did, and taking the steps I did, I was trying to help protect the prime minister and the government from a horrible mess,” she wrote in a letter to fellow Liberals.
Shortly after breaking the news of her expulsion, she sent another tweet.
“What I can say is that I hold my head high & that I can look myself in the mirror knowing I did what I was required to do and what needed to be done based on principles & values that must always transcend party,” she tweeted.
The Federal Reserve Board of Governors has barred former Goldman Sachs Group Inc. investment bankers Tim Leissner and Roger Ng from working in the banking industry because of their alleged involvement in illegally diverting funds from Malaysian state investment fund1Malaysia Development Bhd.
The Fed said Tuesday Mr. Leissner, the former head of Goldman’s Southeast Asia business, agreed to his ban from the industry and has been fined $1.42 million.
In 2012 and 2013, Messrs. Leissner and Ng worked on bond offerings for the sovereign wealth fund, known as 1MDB, the Fed said. Money that was diverted from the fund was used to bribe government officials and for the “conspirators’ personal benefit,” the Fed said in a statement.
The New York-based investment bank raised $6.5 billion for 1MDB, and authorities have alleged $2.7 billion of funds were stolen.
.. Mr. Leissner pleaded guilty last year to U.S. charges of conspiracy to launder money and violate antibribery laws. He is due to be sentenced June 28. The attorney general in Malaysia filed charges against the former Goldman banker last year.
In one instance, prosecutors said, the head women’s soccer coach at Yale accepted a $400,000 bribe in exchange for admitting a candidate as a recruited athlete. The student didn’t even play competitive soccer, according to prosecutors. After the student was admitted, her parents paid a college admissions consultant $1.2 million.
The consultant, William Singer, is expected to plead guilty to racketeering and other crimes Tuesday afternoon. He allegedly facilitated the fraud through Newport Beach, Calif.-based the Edge College & Career Network LLC.
Mr. Singer allegedly accepted payments in exchange for arranging that some of the teens could sit for the SAT or ACT college-entrance exams with extra time by getting doctor’s notes detailing learning disabilities or other issues, and that they take the tests with proctors who had been bribed to either correct wrong answers or take the test on the student’s behalf. Parents paid Mr. Singer between $15,000 and $75,000 for the test help, according to prosecutors.
Mr. Singer also allegedly helped parents work with coaches to claim admission spots reserved for recruited athletes, staging photos of the teens playing sports or photo-shopping images of the teens’ faces onto stock photos of young athletes.
Prosecutors alleged that charitable organizations were used as fronts for the bribery payments, which figured into the tens or hundreds of thousands in certain cases. Parents made the payments in the form of donations to his nonprofit organization, Key Worldwide Foundation
Other high-profile parents named in the case include Gordon Caplan, co-chairman of New York City law firm Willkie Farr.
Also charged was Bill McGlashan, founder and managing partner of TPG Growth, the arm of the private-equity firm that invests in fast-growing companies, including Airbnb Inc. and Uber Technologies Inc. With $13.2 billion in assets, TPG’s growth business has played a prominent role in the firm’s strategy since the financial crisis, and Mr. McGlashan’s star has risen at the firm.