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Class-action lawsuit filed against 8 colleges in admissions bribery scandal that nabbed business CEOs and Felicity Huffman

Dan Mangan
  • A class-action civil lawsuit has been filed against eight universities in connection with the massive college admissions bribery scandal.
  • Defendants in the lawsuit are Yale University, the University of Southern California, Stanford University, UCLA, the University of San Diego, the University of Texas, Wake Forest University and Georgetown University. Federal prosecutors have said the schools were victims of the scam.
  • Federal criminal charges related to the scandal were filed Tuesday against TV stars Felicity Huffman and Lori Loughlin, as well as top business and legal executives, such as Manuel Henriquez, formerly of Hercules Capital, and former Pacific Investment Management Co. CEO Douglas Hodge.


A class-action civil lawsuit has been filed by two California college students against eight top universities in connection with the massive college admissions bribery scandal that has already led to federal criminal charges earlier this week against TV stars Felicity Huffman and Lori Loughlin, as well as against top business and legal executives.

The suit filed in U.S. District Court for the Northern District of California by Stanford University students Erica Olsen and Kalea Woods accuses each of the universities of being "negligent in failing to maintain adequate protocols and security measures in places to guarantee the sanctity of the college admissions process."

And the suit, which claims more than $5 million in damages, says that as a result of the scheme "unqualified students found their way into the admissions rolls of highly selective universities, while those students who played by the rules and did not have college-bribing parents were denied admission."

Although there are currently only two named plaintiffs in the suit, the action would ultimately include potentially thousands of students as plaintiffs, if not more, if the case is granted class-action status by a judge.

Defendants in the lawsuit are Yale University, the University of Southern California, Stanford University, UCLA, the University of San Diego, the University of Texas, Wake Forest University and Georgetown University. Federal prosecutors have said the schools were victims of the scam.

Also named as defendants are William "Rick" Singer and his college preparatory business, the Edge College & Career Network, who had pleaded guilty to masterminding the scheme to help children of wealthy people get into universities through a combination of bribing college athletic coaches, having other people take admission tests for the applicants and hiring people to correct students' incorrect answers on those tests.

The suit claims that the universities named as defendants "knew or should have known of these corrupt practices because the funds" that were being used as bribes to gain admittance for the children of wealthy parents "were often going into University accounts, and to prominent University figures such as coaches and directors in charge of University accounts."

The suit says that the plaintiff "Olsen has also been damaged because she is a student at Stanford University, another one of the universities plagued by the fraud scandal. Her degree is now not worth as much as it was before, because prospective employers may now question whether she was admitted to the university on her own merits, versus having parents who were willing to bribe school officials."

And it says that her co-plaintiff, Woods, at the time she applied to USC for admission, "similarly was never informed that the process of admission at USC was an unfair, rigged process, in which parents could buy their way into the university through bribery and dishonest schemes."

"Had she known that the system at USC was warped and rigged by fraud, she would not have spent the money to apply to the school. She also did not receive what she paid for — a fair admissions consideration process," the lawsuit says, noting that Woods had paid $85 for her application to USC.

Wake Forest's president, Nathan Hatch, in a letter to parents that was obtained by NBC News, wrote: "I am writing today to address some of the most frequent questions I have received and to make abundantly clear that Wake Forest is considered by the U.S. Department of Justice to be a victim of this fraud."

Hatch added, "In no way has it been suggested that the University was involved in the deceitful practices, nor were any employees, other than [Wake Forest volleyball coach Bill] Ferguson, accused of wrongdoing." Ferguson has reportedly been placed on administrative leave.

A spokesman for the University of Texas said, "Like many students and families across the country, we are also outraged that parents, outside actors and university employees may have committed fraud surrounding admissions at universities."

"The University of Texas has a thorough, holistic admissions process. The actions alleged by federal prosecutors against one UT employee were not in line with that policy and may have been criminal," the spokesman said. "They do not reflect our admissions process."

Stanford University spokesman E.J. Miranda said, "The suit is under review."

Lawyers for Olsen and Woods, as well as spokesmen for the six other universities, did not immediately respond to requests for comment.

The lawsuit comes on the heels of a tsunami of media coverage of the criminal charges against "Desperate Housewives" star Huffman and "Full House" actress Loughlin, as well as against the other well-heeled defendants.

Huffman, according to federal authorities, "made a purported charitable contribution of $15,000 ... to participate in the college entrance exam cheating scheme on behalf of her eldest daughter. "

She was also accused of paying someone to proctor her daughter's SAT and correct wrong answers.

Loughlin, who was released on $1 million bail on Wednesday, is accused with her husband, fashion designer Mossimo Giannulli, of paying a total of $500,000 in bribes to get their two daughters admitted to the USC.

The daughters were given preferred status for admissions purposes because they supposedly were rowing recruits. Neither of them rows.

Manuel Henriquez of Hercules Capital HTGC on Wednesday voluntarily stepped aside as chairman and CEO, effective immediately, in the wake of charges he participated in the $25 million college admissions cheating scheme . Federal investigators dubbed their probe Operation Varsity Blues.

Also charged in the alleged scam is former Pacific Investment Management Co. CEO Douglas Hodge, William McGlashan Jr., a senior executive at TPG Capital; Gordon Caplan, co-chairman of international law firm Willkie Farr; and Agustin Huneeus, head of the Huneeus vineyard in Napa Valley. McGlashan and Caplan were both placed on indefinite leave by their firms.

Prosecutors allege that Hodge paid hundreds of thousands of dollars in bribes for his daughters' admission to USC.



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