How A Crook Got Into Stanford B-School

BACKGROUND CHECKS ON ADMITS HAVE BECOME COMMON IN PAST FIVE YEARS

“A typical check is that the school registers with Kroll, and as a candidate you have to give Kroll contact information of employers and recommenders,” adds Kreisberg. “Then Kroll hires some kid in India to call those people and find out if you really worked there or if Mr. X wrote that recommendation. There are lots of variants of that, but that is the template.  This is not a foolproof system, especially when dealing with the likes of a focused and expert fraudster like Martoma, but this security space is always a cat-and-mouse game or an arms race.”

In fact, his name change also would have complicated matters. “If he legally changed his name right before applying, they might not have gotten a hit at the time,” says Shawn O’Connor, founder of Stratus Admissions Counseling, an admissions consulting and test prep firm.  “Finally, if he never said he attended HLS, it would have been substantially harder for them to find this then if he did say he attended and just said he dropped out or something (since then they would have known to check this with Harvard). But if he didn’t say he attended Harvard, I wonder how he accounted for those years on his resume/application.”

Stanford’s application would have required Mathew Martoma to disclose his expulsion from Harvard. “Our application includes questions asking applicants about attendance, academic status, and disciplinary actions at other institutions,” explains a spokesperson for the school. “Expulsion from another institution due to fraud, if it were disclosed or known, would create a serious impediment to admission. We ask applicants if they have ever been suspended or dismissed from any college, university, or post-secondary institution or been the subject of disciplinary action by such an institution. We also ask if they have been placed on academic probation. If they answer yes to any of these questions, we ask for a full explanation. We also require transcripts from all post-secondary institutions attended.”

SHOULD STANFORD REVOKE HIS MBA DEGREE?

Bruce Payne, a former professor at Duke University, where Martoma obtained his B.A. degree, told USA Today that he stressed Martoma’s strong ethical code when he wrote a recommendation letter for his ex-pupil’s application to Stanford GSB. Martoma was in Payne’s ethics and policymaking class in 1994, before later becoming his chief teaching assistant for the class. Payne, now executive director of the Shelley & Donald Rubin Foundation, wrote that Martoma was “extraordinarily intelligent,” ”remarkably analytic” and “wonderfully fair-minded.”

“No one has contributed more to our class discussions of Sissela Bok’s Lying, nor was anyone in our class as acute on the issues of moral capacity raised by Camus’ The Plague,” Payne told Stanford.

Lou Colasuonno, a spokesman for Martoma, told the Times that Martoma’s expulsion from Harvard “is entirely unrelated” to his trial in Federal District Court in Lower Manhattan. Federal prosecutors charge that in July 2008, Martoma used inside information about a clinical drug trial being conducted by Elan and Wyeth to recommend that SAC dump a substantial $700 million stock position in shares of both companies. The firm even shorted some shares and netted profit totaling $276 million.

For Stanford, the bigger question today is whether it should revoke Martoma’s degree because he obviously lied his way into the school’s prestigious MBA program. “One issue is, if Martoma’s application omitted the HLS expulsion, what is Stanford going to do?,” asks Kreisberg. “There are cases where schools revoke diplomas after the fact, for situations involving fraud and omissions in the application. Stanford could do that, but it may not be clear how much of his circa 2000 application they still possess.”

WHAT IF HE ADMITTED TO FAKING HIS HARVARD LAW GRADES?

“One intoxicating possibility is that he confessed to the HLS expulsion, and wrote some What Matters Most To Me jive about it, as leading to self-knowledge, remorse, and strong values,” adds Kreisberg. ” I don’t think that happened, but Stanford admissions  is nutty and phony enough, on the right day, with the sun shining at the right angle, to  go for that, sort of professional courtesy for a fellow values BSer.”

A spokesperson for Stanford told Poets&Quants that the school has “no blanket policy, but we regard misstatements or material omission as very serious matters and application fraud can lead to dismissal.  We would treat a misstatement about, for example, leaving a job in May vs. June differently from a fraudulent transcript. In a typical year, we revoke one to three offers of admission.”

DON’T MISS: MBA ADMITS FACING BACKGROUND CHECKS or ONE IN FOUR ADCOMS USE GOOGLE TO CHECK ON MBA APPLICANTS