The former University of Texas at Austin tennis coach accused of illegally helping a Los Altos Hills student gain admission to the college through a bogus recruitment to his team has agreed to plead guilty to charges against him.
Michael Center, 54, will plead guilty to one count of conspiracy to commit mail fraud and honest services mail fraud, the United States Department of Justice announced Monday (April 8).
Center is implicated in the so-called Operation Varsity Blues scandal. Prosecutors said the case involves parents across the country hiring college admissions counselor William “Rick” Singer and his Newport Beach-based company, The Edge College & Career Network LLC, to fraudulently get their children into universities. The path to college was paved by bribing athletic coaches to recruit students to teams they did not qualify for and/or by bribing SAT and ACT test administrators to take or fix students’ college entrance exams.
In total, clients paid Singer approximately $25 million in the scam, which took place between 2011 and 2018, according to charging document filed against him. He has cooperated with authorities and pleaded guilty March 12 to charges of racketeering conspiracy, money-laundering conspiracy, conspiracy to defraud the United States and obstruction of justice.
The DOJ has not named the Los Altos Hills parent in the case against Center, but he is believed to be Christopher Schaepe, a Silicon Valley venture capitalist whose connection to the scandal became public late last month after he disclosed it to Lightspeed Venture Partners, the Menlo Park company he co-founded. Lightspeed has since fired Schaepe. He is not charged in the case and denies any wrongdoing, according to a spokesperson for Sard Verbinnen & Co., the communications firm representing him.
In 2015, Center accepted $60,000 in cash for himself and $40,000 for the UT tennis program from Singer to designate a student from Los Altos Hills as a recruit to his tennis team, even though the student did not play the sport competitively, according to a DOJ press release. By doing so, Center secured the student’s admission to the college; he withdrew from the team shortly after starting classes in September 2015.
The parent of the student made more than $630,000 in stock donations to Singer’s nonprofit, The Key Worldwide Foundation (KWF), according to the criminal complaint against Center. The charity supposedly provided educational opportunities for underprivileged children.
Additional developments in the case this week include DOJ announcements about “Varsity Blues” parents who have decided to plead guilty and others who have been indicted on a new charge by a federal grand jury in Boston. Thirteen parents charged with one count of conspiracy to commit mail fraud and honest services mail fraud – including Hollywood actress Felicity Huffman and Bay Area residents Agustin Huneeus Jr. of San Francisco, Marjorie Klapper of Menlo Park and Peter Jan Sartorio of Menlo Park – have agreed to plead guilty, according to the DOJ. Sixteen other parents previously charged with one count of conspiracy to commit mail and wire fraud and honest services mail and wire fraud now face a count of conspiracy to commit money laundering as well to reflect how they allegedly disguised bribes to KWF as donations and to Singer’s college counseling business as payments for legitimate services. That second group of defendants includes Hollywood actress Lori Loughlin and her husband, clothing designer Mossimo Giannulli, and Bay Area residents Marci Palatella of Hillsborough and married couple Manuel and Elizabeth Henriquez of Atherton.
In addition to hiring Singer to help their two daughters cheat on college admission exams, the Henriquezes are accused of sending KWF $400,000 so their older daughter could attend Georgetown as a tennis “recruit,” according to the indictment against them. In a recorded phone call between Singer and Elizabeth Henriquez in October, he told her the IRS had inquired about the “large sums of money” she had donated.
“So what’s your story?” Elizabeth Henriquez asked.
“So my story is, essentially, that you gave your money to our foundation to help underserved kids,” Singer replied.
“Of course,” she said.
The charge of conspiracy to commit mail and wire fraud and honest services mail and wire fraud carries a maximum sentence of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss – whichever is greater. Conspiracy to commit money laundering can lead to a maximum 20-year prison sentence, three years of supervised release and a fine of $500,000 or twice the value of the property involved in the crime.