Presidents Of Real Estate Investment And Development Firms Plead Guilty In College Admissions Scandal
Two presidents of commercial real estate investment and development companies are pleading guilty to using bribery and other forms of fraud for their role in a massive college admissions scandal that has rocked the nation.
Costa Mesa-based Crown Realty & Development founder and CEO Robert Flaxman and Bay Area-based WP Investments President Bruce Isackson were among 16 parents who pleaded guilty or were planning a guilty plea to charges of mail fraud and honest services mail fraud on Monday, according to the U.S. Department of Justice in Massachusetts.
The parents are accused of paying ringleader William "Rick" Singer tens of thousands to hundreds of thousands of dollars to have someone either take or doctor a college entrance exam for their children or bribe college athletic officials to secure their children's admission into an elite university as a supposed athletic recruit.
Flaxman is accused of paying scheme mastermind Singer $75K to have someone doctor or proctor the SAT and ACT college entrance exam for his daughter to secure her entrance into a university, according to the Justice Department.
Bruce Isackson and his wife, Davina Isackson, plan to plead guilty, the Justice Department said in a news release and one of the lawyers for the couple confirmed with Bisnow.
Aside from the guilty plea, Bruce and Davina Isackson have agreed to cooperate with the government and provide prosecutors with their knowledge of the bribery scheme, Davina’s attorney, Boies Schiller Flexner partner David K. Willingham, told Bisnow.
Bruce Isackson is the president of WP Investments in Woodside, California. It is unclear if he is still with the Bay Area real estate investment company. A voice message to his office was not returned. His profile on the company website appears to have been removed.
The couple expressed remorse for their role in a statement provided by Willingham.
“No words can express how profoundly sorry we are for what we have done,” the Isacksons said. “Our duty as parents was to set a good example for our children and instead we have harmed and embarrassed them by our misguided decisions. We have also let down our family, friends, colleagues and our entire community. We have worked cooperatively with the prosecutors and will continue to do so as we take full responsibility for our bad judgment.”
Willingham did not provide any more information.
The admission to guilt and guilty pleas come a month after federal authorities arrested 50 people, including Hollywood stars Lori Loughlin and Felicity Huffman, for their involvement in a eight-year-long scheme led by Singer, in which wealthy parents paid him hefty sums to have their children admitted into some of the top universities in the nation.
The fallout has led to many of these high-profile parents and university officials losing their jobs, a re-examination of the college admissions process and the expulsion of involved students.
Singer pleaded guilty to all charges last month.
The parents allegedly agreed to contribute to a nonprofit operated by Singer, giving as much as $250K per child, to secure their student's admittance as a purported student-athlete.
The parents would then write off the money as a charitable donation. Singer and those purported to be part of the scheme would use that money to bribe coaches, university officials and others to secure the student's spot, the Justice Department said.
Authorities allege the Isacksons paid Singer $500K in Facebook stocks and an additional $125K to college coaches to secure their older and younger daughters’ admission to UCLA and USC, respectively, as recruited athletes despite the two not playing the named sports.
The Isacksons' older daughter was accepted to UCLA and was part of the UCLA women's soccer program, according to reports. She had never played organized soccer prior to her admittance, the federal documents show.
Authorities allege the Isacksons also paid Singer to secure their youngest daughter's admission to USC as a purported rowing recruit despite her being an avid equestrian.
Two other high-profile commercial real estate executives — Dragon Global CEO Robert Zangrillo and John B. Wilson, a founder and CEO of an undisclosed private equity and real estate development firm — were also implicated in the scheme.
It is unclear whether they are contemplating a guilty plea.
As part of the guilty pleas, all of the defendants who wrote off the payments to Singer as tax deductions will pay back the money to the IRS, the Justice Department said.