Sunday June 16th, 2019 8:48PM

Feds: Charity funneled millions in college bribery scam

By The Associated Press
Related Articles
  Contact Editor

The mastermind of a wide-ranging college admissions scandal set up a charity that wove a deep web of deception and fraud to mask bribes and payoffs, funneling millions of dollars through the tax-exempt organization under the nose of U.S. officials, according to prosecutors and tax documents reviewed by The Associated Press.

William "Rick" Singer registered Key Worldwide Foundation as a charity in 2013, gaining accredited 501(c)3 status with the federal government. Its tax filings reported revenue that doubled each year, from $451,600 in its first year to $3.7 million in 2016.

Singer, painted by prosecutors as the ringleader of the biggest school admissions scandal ever prosecuted by federal authorities, is accused of funneling money from wealthy parents through his foundation, then using it to bribe coaches and others to get their children into elite universities.

Prosecutors said he also accepted so-called donations from clients to help their kids get a coveted enrollment spot through cheating. The scheme allowed the parents to claim tax deductions for themselves.

By funneling millions of dollars with such apparent ease, nonprofit experts are renewing their criticism of the Internal Revenue Service's limited ability to police wrongdoing.

"There is not an enormous amount of resources at the IRS and in other parts of the government to provide oversight in real time. What we're seeing now is it took years for the government to break down this situation," said Larry Lieberman, former chief operating officer at Charity Navigator, a nonprofit watchdog.

Singer pleaded guilty to fraud and conspiracy charges in federal court Tuesday in Boston. Coaches and dozens of parents are among the 50 people charged in the scheme, including actresses Felicity Huffman and Lori Loughlin and high-achieving figures in such fields as law, finance and fashion.

The Internal Revenue Service has been investigating the criminal case jointly with the FBI, said Amy Hosney, special agent with the IRS' criminal investigation division, who called it a "very troubling scenario."

"With the alleged payments from the parents through the foundation as 'donations' and coming out on the other side as bribes, we're certainly looking at the transactions," Hosney said.

Much of the $2.7 million that Singer is accused of funneling as grant donations appears to be part of an elaborate charity scheme to mask his reported bribes to university coaches, according to an AP analysis of the foundation's 990 tax records.

Singer used the money to pay off his co-conspirators, prosecutors say, including administrators of college entrance exams who rigged the ACT and SAT testing process and university coaches who put students who didn't play sports on team recruitment lists to improve their chances of getting admitted to schools such as Yale, Stanford and Georgetown.

The charity claimed to give the most grants to the University of Southern California — nine in all that totaled $550,000.

USC officials wouldn't comment on whether it ever received such donations, but the grant descriptions and amounts allude to the bribes that prosecutors noted, including $175,000 to "USC Water Polo" and $100,000 to "USC Soccer Programs."

Coaches in those programs have been indicted on criminal charges.

In 2013 with Singer as Key Worldwide's president and CEO, the charity gave out two grants: $10,000 to "Georgetown Tennis" and $100,000 to an organization called "Fullerton Futobol Academy Inc." with an address belonging to California State University, Fullerton.

Chi-Chung Keung, spokesman for Cal State Fullerton, said the university discovered through state records that the organization listed by Singer is actually tied to USC women's soccer coach Ali Khosroshahin, who was indicted in the sweeping criminal case this week.

Khosroshahin previously coached at Cal State Fullerton, which does have an affiliation with a different program that bears a similar name to the one Singer listed.

Cal State Fullerton, Georgetown, Yale and New York universities said they never received the donations that the foundation claimed to have dispersed to them.

Aside from grants, Singer also found other ways to pay a coach. Former Georgetown tennis coach Gordon Ernst was named a consultant and paid $1.3 million by the foundation.

Georgetown said it had already fired Ernst for violating admissions rules before he was indicted.

Some of the foundation's other listed donations were fake, while Singer used some of them personally.

DePaul University confirmed it received three grants from Key Worldwide that Singer made as a parent, which the Chicago school solicited. His son graduated from the university in 2017. The grants were designated for study abroad programs, though Singer listed them in tax records as for the "religious studies department."

Some grants were listed as going to organizations whose connections couldn't be verified. They include "Community Donations," which shared an address with Singer's foundation, and philanthropic efforts such as the "Friends of Cambodia," a group that told the Palo Alto Weekly that it didn't know of and had never received money from Key Worldwide.


Follow Sally Ho on Twitter:

  • Associated Categories: U.S. News, Associated Press (AP), AP Sports, AP National News, Top U.S. News short headlines, College Sports, AP Business, AP Business - Small Business
© Copyright 2019
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Feds: Charity funneled millions in college bribery scam
A charity helped the man accused of masterminding a wide-ranging college admissions scandal funnel millions of dollars in bribes
1:16PM ( 6 minutes ago )
Foreign adoptions to US fall by 14 percent, continuing trend
New State Department figures show that the number of foreign children adopted by U.S. parents plunged nearly 14 percent last year, extending a decline that's now continued for 14 years
1:15PM ( 8 minutes ago )
Moving day: Bear family living in highway median relocated
A portion of a Massachusetts highway was shut down while state wildlife officials moved a family of bears that had set up a den in the median
1:08PM ( 14 minutes ago )
Associated Press (AP)
Executive gave tip that launched admissions bribery case
Authorities began investigating the wide-ranging college admissions scandal after receiving a tip from an executive who prosecutors were targeting in a securities fraud probe
12:44PM ( 38 minutes ago )
Duke: Williamson to play in ACC quarterfinal vs. Syracuse
Duke freshman star Zion Williamson will play in the Blue Devils' quarterfinal matchup with Syracuse in the Atlantic Coast Conference Tournament
12:10PM ( 1 hour ago )
Ronaldo inspires praise, and more goals, from Messi
Now playing in different countries, Lionel Messi and Cristiano Ronaldo still find ways to inspire one another to new heights
9:57AM ( 3 hours ago )
AP Sports
Anguished families of crash victims find nothing to bury
Anguished families of crash victims fear there is nothing to bury; 'they will stay missing'
12:44PM ( 38 minutes ago )
Students file lawsuit against colleges in bribery scandal
Two college students have filed a lawsuit against the University of Southern California, Yale University and other colleges where prosecutors say parents paid bribes to ensure their children's admission
12:44PM ( 38 minutes ago )
Donors team up to expand #MeToo's impact in the workplace
A group of prominent U.S. foundations is launching a new fund aimed at combating sexual violence and harassment in the workplace
12:40PM ( 42 minutes ago )
AP National News
Jussie Smollett pleads not guilty to lying about attack
"Empire" actor Jussie Smollett has pleaded not guilty to the charges accusing him of lying to police about being attacked in downtown Chicago a few weeks ago
11:54AM ( 1 hour ago )
'Empire' actor expected to plead not guilty at hearing
"Empire" actor Jussie Smollett is expected to plead not guilty Thursday to charges accusing him of lying to the police about being the victim of a racist and homophobic attack in downtown Chicago a few weeks ago
10:25AM ( 2 hours ago )
US moves to lift remaining gray wolf protections
U.S. wildlife officials want to strip gray wolves of their remaining endangered species protections and declare the species recovered following a decades-long restoration effort
10:24AM ( 2 hours ago )
Top U.S. News short headlines
BUBBLE WATCH: TCU, St. John's earn big Wednesday wins
TCU and St. John's were among the programs that earned wins on Wednesday to bolster their NCAA Tournament resume
3:48AM ( 9 hours ago )
Colgate beats Bucknell 94-80 for Patriot League title
Jordan Burns scores career-high 35 points and Will Rayman adds 18 to lead top-seeded Colgate to a 94-80 win over No. 2 Bucknell in the championship game of the Patriot League Tournament; Raiders going to NCAA Tournament for first time since 1996
12:19AM ( 13 hours ago )
Coaches and parents in college scheme find jobs in danger
Colleges and companies are moving swiftly to distance themselves from employees swept up in a nationwide college admissions scheme
10:13PM ( 15 hours ago )
College Sports
The Latest: French air agency shares photo of data recorder
The Latest: French air agency shares photo of data recorder; analysis to begin Friday
12:47PM ( 35 minutes ago )
NATO weighs allegations that Huawei poses security risk
NATO Secretary-General Jens Stoltenberg says the military alliance is mulling how to respond to security concerns raised by some member countries about Chinese tech giant Huawei
12:39PM ( 43 minutes ago )
Putin courts Russian business, keeps mum on jailed US exec
Russian President Vladimir Putin has promised that the government will do more to encourage investments and reduce business risks
12:33PM ( 50 minutes ago )
AP Business
Alaska poised to let people use marijuana at certain stores
Alaska is poised to become the first state in the nation with statewide rules allowing people to use marijuana at certain stores where they buy it.
4:47PM ( 20 hours ago )
New Mexico bill would create first state-run pot shops in US
New Mexico would become the first U.S. state with its own government-operated marijuana stores under a bill brokered between Democratic and Republican legislators.
10:13PM ( 1 day ago )
California agencies at odds over Colorado River drought plan
A major Southern California water agency is trying to push the state through a final hurdle in joining a larger plan to preserve a key river that serves 40 million people
6:35PM ( 1 day ago )
AP Business - Small Business
Foreign adoptions to US fall by 14 percent, continuing trend
New State Department figures show that the number of foreign children adopted by U.S. parents plunged nearly 14 percent last year, extending a decline that's now continued for 14 years
1:15PM ( 8 minutes ago )
Moving day: Bear family living in highway median relocated
A portion of a Massachusetts highway was shut down while state wildlife officials moved a family of bears that had set up a den in the median
1:08PM ( 14 minutes ago )
Reputed Gambino crime boss shot to death in New York City
The reputed boss of New York's Gambino crime family has been gunned down outside his home, dying a virtual unknown compared with his swaggering 1980s-era predecessor, the custom-tailored tabloid sensation John Gotti
1:07PM ( 15 minutes ago )
'Apprentice' contestant's Trump defamation suit can proceed
A New York appeals court has ruled that President Donald Trump isn't immune from a defamation lawsuit filed by a former "Apprentice" contestant who accused him of unwanted kissing and groping
1:02PM ( 20 minutes ago )
'Zorba the Greek' composer Theodorakis leaves hospital
An Athens hospital statement says "Zorba the Greek" composer Mikis Theodorakis has been discharged after undergoing surgery to have a pacemaker installed
1:01PM ( 21 minutes ago )