College admissions scandal: federal investigators found early clues

July 26, 2019 5 AM PT

Federal authorities were combing through the finances and phone records of a Miami businessman suspected of Medicare fraud when they came across a curious name: Rick Singer.

Philip Esformes, who was accused of farming out patients from his nursing homes to steal millions in bogus insurance claims, had sent hundreds of thousands of dollars to a foundation Singer controlled. And in text messages discovered on Esformes’ phone, the men discussed how one of Esformes’ sons had performed on his college entrance exams.

Only years later would authorities learn what Esformes had paid Singer to do: Slip his daughter into USC as a fake soccer player and fix his youngest son’s college entrance exam, according to statements a prosecutor made in court and sources familiar with the case.

Singer has said he struck similar deals with dozens more parents, an admission that has roiled higher education and implicated elites from Hollywood, Silicon Valley and the Newport coast.

But in 2016, when agents seized the iPhone Esformes used to text Singer and obtained their messages, Singer was a peripheral, if curious, player in an enormous healthcare fraud investigation. The Esformes case marks the first time Singer is known to have crossed the radar of law enforcement.

Singer would run his admissions scam undisturbed until another team of investigators, working in Boston on an altogether different case, caught a second glimpse of his operation in 2018 and unraveled it.

Andrew Lelling, the U.S. Attorney in Massachusetts, unveiled that investigation in March. Fifty people were charged, including dozens of parents and coaches at such elite schools as Yale, Stanford, Georgetown and USC, who were accused of selling spots that their schools reserved for recruited athletes.

Esformes has not been charged in the college admissions case. Convicted in April of paying and receiving kickbacks in connection with a federal healthcare program and other crimes, he faces decades in prison when a judge sentences him in September. His attorneys declined to comment.

Spokespeople for federal prosecutors in Boston and Miami declined to comment.

It is unclear how much federal authorities uncovered of Esformes’ dealings with Singer while investigating his case. But at his trial in March, a fraud expert used by the government to make sense of his finances testified that Esformes had made $400,000 in payments over several years to Singer’s foundation. At least some of the money was traced to Medicaid and Medicare funds, the expert testified.

Singer has since admitted that his Key Worldwide Foundation was little more than a sham used to launder money from clients and parcel out bribes to coaches, test proctors and bagmen.

Singer found an ideal client in Esformes, an enormously wealthy businessman with a flexible moral compass, who was willing to pay top dollar to boost his kids’ prospects at getting into elite colleges.

By the time Esformes was charged with healthcare fraud and arrested in July 2016, he had paid Singer to bribe one child’s way into school and fix a college entrance exam for another, according to comments by a prosecutor in the college admissions case and sources with knowledge of Singer’s operation.

Esformes paid Singer in 2012 to have his oldest child, a daughter, admitted to USC as a fake soccer recruit, a prosecutor said when a former USC assistant soccer coach pleaded guilty in May. Singer bribed the coach to falsely portray the girl as an accomplished soccer player and give her an admissions slot reserved for athletic recruits, said the prosecutor, Eric Rosen.

The ex-coach, Laura Janke, has admitted to steering several children of Singer’s clients into USC, crafting fake athletic profiles that depicted them as promising recruits and at times using Photoshop software to superimpose their faces onto pictures of real athletes. She has pleaded guilty to racketeering conspiracy.

The daughter, who could not be reached for comment, was enrolled at USC for a year before transferring to a fashion school in New York City, according to a source with knowledge of the case and her LinkedIn profile.

Esformes reconnected with Singer in 2014 as his older son began applying to college, text messages show. The messages were filed in court during Esformes’ trial.

FBI agents seized three iPhones from Esformes’ luxury high-rise when they arrested him in July 2016. In a string of text messages obtained from one of the phones, Esformes sought Singer’s opinion of his son’s SAT score.

“I think total was 2000,” Esformes reported.

“Very good for starter,” Singer replied.

The two men went back and forth, with Esformes asking what score “gets u in all?” Singer explained athletic recruits were held to a lower test-score standard than regular applicants.

The distinction would take on importance when authorities learned Esformes had hired an associate of Singer, Martin Fox, to provide one-on-one basketball coaching for his son. As with Singer, prosecutors found Esformes’ payments to Fox significant enough to tally the $114,000 Esformes paid him and have the jury hear testimony about Fox during trial, according to transcripts of the trial.

Fox, a basketball coach in Texas and well-connected figure in national youth and college basketball circles, has been charged in the college admissions case for allegedly relaying bribes from Singer to two coaches and an exam proctor. Fox has pleaded not guilty and his attorney declined to comment.

When it came time for his son to apply to college, Esformes appears to have taken a page from Singer’s playbook. In a bribery deal similar to what prosecutors say Singer pulled off for his daughter, Esformes paid the head basketball coach at the University of Pennsylvania more than $300,000 to put his son on a list of recruited players, according to testimony from the coach, Jerome Allen.

Allen said during Esformes’ trial that the businessman’s son wasn’t qualified to play basketball for the school and wouldn’t have been admitted without his endorsement. There is no indication Singer was involved in that deal.

The son, who graduated this year from the University of Pennsylvania, declined to comment.

Prosecutors in Esformes’ case charged Allen with money laundering, and added a bribery charge to the dozens Esformes had already faced. Allen, now an assistant coach with the Boston Celtics, pleaded guilty and was sentenced this month to four years of probation.

Esformes paid Singer to rig his third child’s college entrance exam in late 2015, people familiar with the investigation said. An expert test-taker corrected the boy’s answers at a public high school in Houston, where Singer has acknowledged paying off a teacher to turn a blind eye to the cheating, the sources said. The teacher, Niki Williams, has been charged with racketeering conspiracy. She has pleaded not guilty.

Esformes’ estranged wife is seeking a divorce. She declined to comment through her attorney.

Esformes has remained in custody since his arrest in July 2016. A judge found him a flight risk and denied him bail.

While he sat behind bars, Singer’s operation — both his above-board college counseling business and the criminal enterprise beneath — was booming. Many of the 33 parents charged in the admissions scandal hired Singer during the period following Esformes’ arrest.

Singer even picked up another Miami client — Robert Zangrillo, a venture capitalist whose daughter, like Esformes’, was allegedly ushered into USC as a fake athletic recruit. Zangrillo has been charged with conspiracy to commit fraud and money laundering. He has pleaded not guilty.

The beginning of the end for Singer came in the spring of 2018, when prosecutors in Boston were told by the target of a securities fraud probe that a soccer coach at Yale was trading recruiting spots for bribes.

The coach, Rudy Meredith, was caught several weeks later taking cash in a videotaped hotel room sting. He confessed, and led authorities to the scam’s ringleader.

On March 13, one day after authorities in Boston charged Singer and 49 others with perpetrating the most prolific college admissions con ever uncovered by U.S. law enforcement, a prosecutor in Miami projected some text messages onto a screen. Philip Esformes was in his 21st day of trial.

The government called one of its expert witnesses to tell the jury about the text messages.

“Did you see any text messages between Mr. Esformes and anyone discussing Morris Esformes’ SAT scores?” the prosecutor asked.

The witness said he had.

“What was the name of that person?”

“A gentleman,” he said, “by the name of Singer.”