Former B-School Dean Indicted On Fraud Charges In MBA Rankings Scandal

The former dean of Temple University’s business school has been indicted on federal conspiracy and fraud charges in one of the biggest rankings scandals that involved fraudulent data submissions to U.S. News to boost the school’s standing.

Moshe Porat, fired from his job as dean in 2018 yet still drawing a $316,000 salary from the university as a tenured professor, was charged along with two of his direct reports—Isaac Gottlieb, a former Fox statistic professor, and Marjorie O’Neill, who oversaw the school’s submissions to U.S. News as manager of finance. The indictment was unsealed today (April 16th) in Philadelphia U.S. District Court, and acting U.S. Attorney Jennifer Arbittier Williams is expected to unveil the case at a news conference Friday afternoon.

The cheating allowed Fox to claim the number one ranking in U.S. News’ online MBA rankings for four consecutive years from 2014 to 2018, until U.S. News removed the school from its ranking and Porat was removed from his job that paid him nearly $600,000 a year in total compensation.

ENROLLMENTS CLIMBED AS THE RANKINGS WENT UP

Prosecutors said the scheme led to increased enrollments and revenue for the school. “At Fox, there was a direct correlation between the U.S. News rankings of its online MBA and part-time MBA programs and the number of students who enrolled in those programs,” according to the indictment. “The higher the programs were ranked, the more students enrolled in the programs the next academic year.”

After Fox’s online MBA was ranked 28th in 2013, the school had roughly 70 incoming MBA students in the following academic year. Yet once U.S. News ranked the Fox program in ninth place, the incoming class nearly doubled to 133 students. Following first No. 1 ranking in 2015, the incoming cohort swelled to 198 students. During the 2017-2018 academic year, after being in first place for three straight years, the school would enroll a class of 336 online MBA students. Once Fox was removed from the ranking by U.S. News, the school was able to still attract a cohort of 106 incoming students in 2019-2020.

A similar pattern emerged in the school’s part-time MBA program, from 88 incoming students in 2015-2016 after the part-time program was ranked 53rd to a new cohort of 194 students in 2017-2018 after the program was ranked seventh best in the U.S.

ACCUSED OF DEVISING A SCHEME TO DEFRAUD APPLICANTS, STUDENTS AND DONORS

The highly detailed indictment (see Anatomy Of A Business School Rankings Fraud) reveals a concerted scheme to game the rankings that started as early as 2010 when Porat renamed his “rankings committee” to “strategic communication group” because he did not think it sounded good to have a group devoted exclusively to rankings at the school. In 2013, he dispatched Marjorie O’Neill and two other employees to travel to Washington, D.C., to meet with U.S. News to express their concerns that the school’s programs were ranked too low.

O’Neill, according to the indictment, would return to tell Porat that U.S. News did not audit the data supplied for the rankings because it lacked the staff to verify the accuracy of the information submitted to it by schools. Porat then disbanded his internal rankings group to keep closer control of the data, appointing O’Neill as the sole provider of the information to U.S. News with assistance from Professor Gottlieb.

From at least July 2014 until at least July 2018, Porat conspired with Gottlieb and O’Neill “to devise a scheme and artifice to defraud and to obtain money and property from Fox applicants, students, and donors, by means of materially false and fraudulent pretenses, representations, and promises,” according to the indictment.

‘REPORT IT THAT WAY’

In the 2012-2013 academic year, only 12 of 48 incoming online MBA students had submitted a GMAT score, an admissions standard that would cause U.S. News to penalize the school in its ranking. O’Neill would later inform Porat that at least 75% of the new students had a standardized test score, the school’s ranking would be impacted.

In the following year, when Fox enrolled 70 new students, only eight of whom had a GMAT, O’Neill told Porat that if Fox instead reported that all 70 of the students had taken a standardized test, Fox would get 100% credit for the school’s GMAT average and the program would go up in the rankings, according to the indictment.

Porat, prosecutors charge, told O’Neill to “report it that way.” In September of 2014, the school reported their stats to U.S. News and the inflated reporting allowed Fox to win a three-way tie for first place in the online MBA ranking for 2015.

RANKINGS BECAME AN OBSESSION FOR THE DEAN, SAY PROSECUTORS

Prosecutors said rankings became something of an obsession for Porat. E-mails and depositions submitted in a defamation case the former dean filed against the university show that Porat pressured his staff for years to find ways to increase the school’s rankings.

When he was unhappy with the progress of his team’s efforts, Porat replaced the team with a handpicked group that included a statistics professor charged with reverse engineering the criteria U.S. News used to calculate school scores.

By 2013, Fox was reliably able to estimate where it would rank on U.S. News’ annual list, former administrators have said in depositions. The results of the fraud allowed the school’s online MBA program to gain top honors in 2014. At a champagne toast after its online MBA won the No. 1 spot for the fourth time, an administrator at Fox asked Porat if he was concerned about the validity of the ranking.

‘WHAT MAKES YOU THINK THEY WILL CATCH IT NOW?’

“Dean Porat said, ‘Well, if they haven’t caught it … what makes you think they will catch it now?’” recalled Christine Kiely, an assistant dean at Fox, in a deposition. “He seemed annoyed that we were talking about it — in essence, turning ourselves in.”

His staff would later testify that it took two meetings to persuade Porat to contact U.S. News to correct the inaccurate data. That move led U.S. News to yank the school from the ranking and led to the unraveling of the scandal.

Through his attorney, Porat, denies the allegations that he has orchestrated the scheme to get better rankings by falsifying data reported to U.S. News. “Dr. Porat dedicated forty years of his life to serving Temple University, first as a faculty member, and ultimately as Dean of the Fox Business School, and he did so with distinction,” Porat’s attorney, Michael A. Schwartz, said in a statement. “He looks forward to defending himself against these charges and to clearing his name.”

‘TEMPLE FOCUSED MORE ON RANKINGS THAN I DID’

Porat has blamed others at Fox for the scandal, contending that he was not in charge of reviewing the work they submitted and has accused Temple of trying to turn him into a “scapegoat” for the scandal.

“In fact,” he said during a deposition, “I think Temple University focused more on rankings than I did.”

After his firing, he said that people he’d known for 40 years “did not send me even a sympathy card or pick up a phone.”