HBS & Stanford MBAs Snared In College Admissions Scandal

Stanford MBA Bill McGlashan (top left) was a member of the GSB Advisory Council, Stanford MBA Robert Zangrillo (center top), Kellogg MBA Augustin F. Huneeus, Harvard MBA John B. Wilson, Harvard MBA Douglas M. Hodge (bottom right), and Michigan MBA Todd Blake

Three Harvard Business School MBA graduates and two Stanford Graduate School of Business MBAs, including a member of the school’s Advisory Council, are among the 33 wealthy and well-connected parents charged with attempting to fraudulently get their children into top universities. At least one of them was allegedly willing to pay $1 million insure that his two daughters would be admitted to Harvard and Stanford.

Two of the biggest names in the criminal complaint are William E. McGlashan Jr., who earned his MBA from Stanford in 1990, serves on GSB’s Advisory Council and is the managing partner of TPG Growth, and Douglas M. Hodge, a Harvard MBA and former chief executive of PIMCO, one of the world’s biggest bond fund managers.

Without naming McGlashan, Stanford GSB Dean Jon Levin said he had placed McGlashan on leave from the school’s Advisory Council pending the outcome of the charges. “The alleged behavior falls far short of the ethical conduct we expect of any member of the GSB community, and especially one serving the school in an important capacity,” he wrote in an email yesterday (March 13) to the school’s community.

BIGGEST COLLEGE ADMISSIONS SCAM EVER BROUGHT BY THE JUSTICE DEPARTMENT

Federal authorities described the $25 million bribery case as the biggest college admissions scam ever prosecuted by the U.S. Justice Department. The investigation, under the code name Operation Varsity Blues, involved confidential witnesses, wiretaps, bank and flight records, and self-incriminating emails. It resulted in a highly detailed 204-page criminal complaint charging the suspects with bribing college coaches and other insiders to get their children into some of the most elite schools in the country, including Yale, Stanford, Georgetown, USC, and Wake Forest.

In some cases, college entrance exam administrators were paid to alter scores or get students extra time on tests. The bribes were allegedly paid through Edge College & Career Network, a Newport Beach company, and an affiliated nonprofit, the Key Worldwide Foundation. The nonprofit, authorities said, offered an opportunity for tax-deductible payments into the scheme. The founder, William Singer, agreed to plead guilty Tuesday to charges including racketeering conspiracy. Between 2011 and 2018, parents paid the firm involved in the scheme some $25 million to bribe coaches and university administrators.

Harvard Business School MBAs Hodge, private equity player John B. Wilson, and outsourcing executive Stephen Semprevivo were named in the criminal complaint, along with Stanford’s McGlashan and Robert Zangrillo. There’s also Northwestern Kellogg MBA Augustin F. Huneeus, a Napa Valley vintner and co-founder of the Quintessa vineyard estate, and University of Michigan MBA Todd Blake. Wilson, CEO of the consulting and private equity firm of Hyannis Port Capital, graduated from Harvard in 1983 at the age of 23, the youngest in a class of 800, according to his LinkedIn profile.

AN INDICTMENT & CRIMINAL COMPLAINT RICH IN EMBARRASSING DETAIL

McGlashan allegedly agreed to pay $50,000 to the Key Worldwide Foundation for its help in getting a son into USC. According to the federal complaint, McGlashan used the service to get his son’s ACT exam scheduled at a “controlled” site in Southern California rather than at Marin Academy.

A “proctor” was flown in from Tampa to administer the test and correct the bad answers later, giving the teen a score of 34 out of a possible 36, authorities allege.

McGlashan and an admissions fraudster also discussed creating a fake sports profile for the teen, allowing him to get into USC as a recruited athlete, authorities said. The consultant asked for a photo of the teen so it could be digitally grafted onto the face of a football kicker, even though his high school didn’t have a football team. “Well, he does have really strong legs,” says McGlashan, in a conversation recorded via a wiretap. “Maybe he’ll become a kicker. You never know. You could inspire him…I love it.”

‘THE WAY THE WORLD WORKS THESE DAYS IS UNBELIEVABLE’

Asked to get a photo of his son so it could be Photoshopped, McGlashan responds, “Let me look through what I have. Pretty funny. The way the world works these days is unbelievable.”

Court documents indicate that in many cases, the students taking the exams were unaware of the arranged cheating. McGlashan’s son “had no idea … that [a cooperating witness believed to be Singer] helped him on the ACT,” the indictment noted.

The other Stanford MBA caught up in the scheme is Robert Zangrillo, who earned his MBA in 1994, and is the founder and CEO of a Miami-based firm that focuses on venture capital and real estate investments. Zangrillo allegedly conspired with Singer to bribe athletics officials at USC to fraudulently designate his daughter as an athletic recruit. He also paid an employee of Singer to take classes on his daughter’s behalf. These bogus grades were submitted as part of her college application.

A STANFORD MBA INVOLVED IN A SCHEME TO FALSELY STATE HIS DAUGHTER ROWED CREW

While Zangrillo’s daughter was initially rejected by USC, he then allegedly conspired with Singer on a new plan that would allow his daughter to transfer to USC as a rowing recruit. Although her previous application showed no indication of rowing prowess or accolades, her transfer application — submitted to USC on Feb. 1, 2018 — falsely stated that she rowed crew at a club 44 hours per week, 15 weeks out of the year.

According to court documents, the USC crew coach agreed to facilitate Zangrillo’s daughter’s acceptance, provided that KFW pay the crew program.

“Okay, I will take her,” the coach allegedly told the cooperating witness, as recorded in the affidavit. “You guys help us, we’ll help you.”

The documents reveal that a senior associate athletic director at USC ultimately did not advocate for Zangrillo’s daughter to admissions department as an athletics recruit, but instead placed her on a “VIP list for transfers.”

In total, Zangrillo wired $200,000 to KFW’s fraudulent charity accounts and also mailed a check of $50,000 to “USC Women’s Athletics.”

DON’T MISS: CAN YOU BRIBE YOUR WAY INTO BUSINESS SCHOOL?

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.