More USC staff accepted bribes and helped admissions scam, feds say

Editor’s note: This story was reported by the Beacon Project, a student journalism initiative supported by the University of Southern California Annenberg School for Communication and Journalism to report on USC. It is independent of the university’s administration. KPCC/LAist has an internship program with the Annenberg journalism school, and Mark Schoofs, one of the Beacon Project’s founders, is an adviser to KPCC/LAist.

Additional employees at USC were involved in the “Varsity Blues” admissions scandal beyond the four indicted so far, according to court documents and prosecutors’ statements.

USC already has more employees charged — three coaches and an athletics administrator — than any other university caught up in the nationwide admissions scam. But in addition to those four employees, prosecutors allege that “others at USC” also took bribes in order to facilitate getting the children of wealthy parents admitted to the school. Prosecutors have not named these people, nor said how many there are. It could not be determined if those individuals are cooperating with investigators or if they will be charged.

Prosecutors have dropped a second, much more specific clue as to where they are looking. U.S. attorneys have long painted Donna Heinel, the senior associate athletic director at the University of Southern California, as a key conduit in the scam. Heinel, prosecutors allege, was the primary contact at USC for college consultant William “Rick” Singer. In exchange for bribes, they charge, Heinel doctored admissions profiles to make Singer’s clients appear as standout athletic recruits even if they were mediocre or didn’t play the sport at all. Heinel, who was fired by USC, has pleaded not guilty.

At least twice in open court, federal prosecutors have stated that “Heinel’s assistants” helped her create and edit bogus athletic profiles for students whose parents paid bribes. Prosecutors confirmed that the “assistants” worked in the USC Athletics Department. This fact has not previously been reported.

Prosecutors have not charged or publicly identified the assistants they allege assisted Heinel, and they declined to say whether those assistants knew they were helping to commit fraud or were unaware of the larger scheme. Prosecutors said their investigation is ongoing.

The developments raise fresh challenges for USC, whose new president, Carol Folt, is trying to move beyond the series of scandals that have battered the university. In just the past three years, USC has been forced to reckon with a basketball coach who admitted to taking bribes, the dean of the medical school who got high on methamphetamine with a prostitute and gave marijuana to a minor, and two campus doctors accused of sexual abuse by scores of patients. Now, the university may face more embarrassing allegations of current or former staff taking bribes or participating, wittingly or not, in a massive scam carried out in the heart of USC’s athletic department.

The larger number of people apparently involved also raises questions about what USC knew — or should have known. In the Varsity Blues case, prosecutors say the bribes paid by wealthy parents didn’t just flow into the personal accounts of Heinel and the coaches. In addition, more than $1.3 million also poured into accounts owned and operated by the USC athletics department, according to charging documents filed in court.

According to prosecutors, USC officials knew that these and other funds were deposited in university accounts. Prosecutors, in charging documents, say they found evidence of one $50,000 payment in “USC records.” In the case of another payment, which went through the water polo coach, USC sent a formal gift receipt for what prosecutors say was a $100,000 bribe. The university has never publicly said whether those alleged bribes raised any accounting flags before the FBI got involved.

USC declined to answer questions for this story, citing the ongoing federal investigation. Previously, the university contended that it was a “victim” of the Varsity Blues scam.

In a statement to the Beacon Project, Heinel’s lawyer said that she “did nothing wrong,” followed instructions and did the job expected of her by USC. USC terminated Heinel’s employment on March 12, the day she was arrested. Singer has pleaded guilty to conspiracy charges involving racketeering, money laundering and fraud.

According to charging documents, Heinel was deeply involved in the admissions scheme as early as February 2015. That month, prosecutors say, Heinel provided handwritten edits to a fabricated football profile for the son of Douglas Hodge, a prominent financier from Laguna Beach, and advised that the profile photograph be swapped out for a “more athletic” picture. Hodge pleaded guilty to conspiracy to commit fraud and money laundering.

Beyond the three indicted USC coaches, prosecutors never indicated that anyone else helped Heinel — until this summer. On June 21, Assistant U.S. Attorney Kristen Kearney stated during a plea hearing for one of the parents indicted in the scheme that "Heinel, with the help of others, including Rick Singer and Heinel’s assistants within the athletics office, created and edited fake athletic profiles, making it appear that the children of Singer’s clients as well as others were true athletes.”

Three days later, Assistant U.S. Attorney Eric Rosen delivered almost the exact same statement at the plea hearing for another parent who was charged in the case, according to the court transcript.

Liz McCarthy, a spokesperson for the U.S. Attorney’s office in Boston, which is prosecuting the case, confirmed via email that “assistants within the athletics office” does not refer to the three USC coaches who were arrested and no longer work at USC: Laura Janke, Ali Khosroshahin, and Jovan Vavic. (Janke and Khosroshahin have both pleaded guilty to one count of racketeering conspiracy; Vavic and Heinel have pleaded not guilty.)

McCarthy declined to answer questions on whether the assistants who helped craft fake profiles committed a crime or helped out unwittingly.

As recently as October, when prosecutors issued additional charges against Heinel and Vavic, they reiterated that “others at USC” accepted bribes.

The Oct. 22 superseding indictment reads: “Singer similarly bribed VAVIC, Janke, Khosroshahin, HEINEL and others at USC to designate students as recruited athletes. VAVIC, Janke Khosroshahin, HEINEL and others at USC accepted these bribes in violation of the duty of honest services they owed USC.”

McCarthy declined to elaborate, saying the investigation continues.

This story was co-published with LAist.