Anatomy Of A Business School Rankings Fraud

‘REPORT IT THAT WAY’

“Report it that way,” Porat allegedly told her.

O’Neill also showed Gottlieb a draft of her proposed submission to U.S. News with the notation, “I changed our response to include 100% entrants providing GMAT and GPA so we receive 100% credit for our GMAT and GPA scores.” Gottlieb said he had reviewed the submission twice and it looked “very good.”

The misrepresentation worked like a charm. When U.S. News came out with its new ranking of Online MBA programs four months later in January of 2015, Fox zoomed up to rank first in a tie with Indiana University’s Kelley School of Business and the University of North Carolina’s Kenan-Flagler Business School. The school’s vastly improved ranking, touted by Porat in marketing efforts, brought not only accolades; it attracted more students. The size of the incoming cohort in the year after the No. 1 ranking soared 90% to 133; the following year Fox enrolled 198 students. By 2017, after Fox had its third consecutive No. 1 ranking, the school’s incoming cohort numbered 336 students, a nearly five-fold jump from the days when it did not capture the top online MBA ranking.

Each year, O’Neill continued to submit misleading data to U.S. News and the misrepresentations would go much farther than falsely reporting standardized test data. Among other things, the school knowingly turned over to U.S. News admissions data to make Fox appear more selective, inflate the grade point averages of incoming students, and reduce the average student indebtedness to make the school appear more affordable. The school also falsely reported the amount of work experience of incoming part-time MBA students and the percentage of MBA students who could be classified as part-time by combining the numbers from its Executive MBA program with those of its part-time evening program and its online MBA offering to achieve better rankings. These misrepresentations caused the ranking for Fox’s part-time MBA to rise from 53rd in the nation in 2014 to seventh three years later in 2017, an improvement that saw incoming students to that program rise to more than double to 194 from 88 over the same timeframe.

TOP LIEUTENANTS WERE AWARE THAT THE SCHOOL’S RANKINGS WERE BUILT ON INTENTIONAL MISREPRESENTATIONS

Inside the school, more people knew that something wasn’t quite right but no one wanted to blow a whistle on the fraud. Porat’s chief deputy and Fox’s former vice dean, Rajan Chandran, said that as early as 2014, he, Porat, and other top lieutenants were well aware that their national rankings were built on intentional misrepresentations. “I didn’t do anything,” he said in a deposition. “That’s my mistake. I ought to have reported it.”

A year before the scandal became public, some began to question the data the school had given to U.S. News for its ranking. In several emails in 2017, Darin Kapanjie, then head of the online MBA program, raised concerns with Tom Kegelman, the assistant dean in charge of the school’s admissions, according to court records. He noted inconsistencies in the numbers that he assumed at the time were mistakes.

“We need all eyes on these and on them now,” Kapanjie warned.

Will Reith, then director of Fox’s graduate enrollment, drafted a separate email to O’Neill noting that the school had incorrectly stated that all students in the online MBA program had taken the GMAT exam. After the next No. 1 ranking, Reith and others were horrified to discover that the errors they had flagged in the data had not been fixed despite assurances that corrections had been made.

‘IF YOU JUST BURNED THE SCHOOL DOWN, I’LL NEVER FORGIVE YOU’

Kegelman confronted O’Neill. “If you just burned the school down, I’ll never forgive you,” he recalled saying in a recent deposition.

When Fox got its fourth No. 1 ranking in a row, the school’s leadership got together after Poets&Quants noted that the school had “claimed” that 100% of its students had taken the GMAT even though the school had a waiver policy in place and also accepted GRE test scores. The debate became heated and then cut short when Porat departed for his celebration of the No. 1 ranking.

The champagne was uncorked and Porat approved  a marketing email boasting of Fox’s fourth consecutive No. 1 ranking. But the very next morning on Jan. 10th, he sent an email to Gottlieb at 6:26 a.m. asking him to calculate the school’s rank if it had accurately reported that only 42 of its 255 students in the latest cohort had reported a GMAT and another 11 submitted GRE scores. The answer: Sixth place, not first.

‘IF THEY HAVEN’T CAUGHT IT, WHAT MAKES YOU THINK THEY WILL CATCH IT NOW?’

In front of other team members, Porat resisted the calls to report anything to U.S. News. “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.”

But the dean finally relented and directed O’Neill to tell U.S. News that a “clerical error” had been made. On Jan. 11th, she informed U.S. News that there had been what she called a “slight discrepancy” in the reported GMAT numbers. Two days later, Porat told Temple University’s president and provost that a “clerical error” had been made but that the school had reported it and he expected that Fox would still be ranked No. 1 or potentially No. 2.

Instead, U.S. News yanked the school from its online MBA ranking altogether on Jan. 24th, setting off a full-blown crisis. Porat again reported to Temple’s president and provost, repeating the lie that a recalculation of the rankings still “would have resulted in us either remaining #1 or perhaps slipping to #2”–even after Gottlieb had earlier informed him that Fox would likely slip to sixth place.

THE DEAN URGED JONES DAY INVESTIGATORS TO HURRY UP THEIR PROBE

The following day, in a meeting with Temple President Richard M. Englert, Porat was told the university wanted to bring in an outside counsel to investigate. Over Porat’s protestations, the university hired the law firm of Jones Day to conduct a probe of what had happened at Fox. The news would only get worse. Over the next few days, Fox administrators discovered other inaccuracies in the data submitted to U.S. News over the years and told him that the school should withdraw from U.S. News rankings.

When Jones Day investigators began their probe in early February, they immediately ran into roadblocks from Porat and Gottlieb.  The dean urged the law firm to hurry up and complete its investigation because of the impact it was having on Fox’s marketability. During one interview, Porat claimed that he instructed O’Neill to contact U.S. News and ask for clarification if there were any questions about filling out the organization’s survey. In fact, the indictment charges, Porat often told O’Neill to interpret questions in a way that would lead to the best rankings for Fox. Porat also urged his personal assistant to download WhatsApp so they could communicate with each other without anyone being able to trace their conversations.

Gottleib, meantime, claimed to the investigators that he was never involved in either reviewing or helping O’Neill prepare answers to the U.S. News ranking survey. When the professor was finally interviewed by FBI agents during the summer of 2019, he claimed that he was unaware that Fox had been reporting inaccurate information to U.S. News until after it was discovered in January of 2018.

O’NEILL ADMITTED TO KNOWINGLY FALSIFYING DATA AT PORAT’S DIRECTION

O’Neill was more forthcoming with the investigators from the law firm. She admitted to knowingly falsifying data for years at Porat’s direction, according to court records. She has since invoked her Fifth Amendment rights and declined to be deposed in a defamation case filed by the former dean against the university. Her spare LinkedIn page, which lacks a photo of her, lists O’Neill as being “retired” and living in the Orlando, Fla., area.

The Jones Day report would be highly damaging. The investigators found numerous examples of misreported data, if not outright fraud, along with evidence of a cover-up. On July 9th of 2018, Temple asked Porat to resign his deanship. When he refused to step down, he was fired from the job he had held since 1996.

“It is my duty to report that the Fox School, under the leadership of Dean Moshe Porat, knowingly provided false information to at least one rankings organization about the Online MBA,” wrote Temple President Englert. “In addition to the misreporting of the number of students who took the GMAT from 2015 to 2018, the average undergraduate GPA was overstated, and there were inaccuracies in the number of offers of admission as well as in the degree of student indebtedness.”

‘FOX HAD IN PLACE A CONCERTED, RANKINGS-FOCUSED STRATEGY’

The Jones Day investigative team interviewed 17 Fox employees and reviewed more than 32,000 documents. It concluded  that, over the past several years, “Fox provided U.S. News with inaccurate information across multiple data metrics that are part of the publication’s OMBA rankings methodology. And while Jones Day focused on information that Fox provided to U.S. News relating to the school’s OMBA program, the investigation revealed that Fox provided U.S. News with erroneous information relating to other programs as well. On certain occasions, Fox’s reporting of inaccurate information to U.S. News was done knowingly and intentionally for the purpose of improving or maintaining Fox’s standing in the relevant U.S. News rankings.”

The firm’s investigators discovered that Dean Porat and other Fox personnel made clear that improving or maintaining Fox’s position in rankings was a key priority.  “Fox had in place a concerted, rankings-focused strategy including detailed analyses of U.S. News’s rankings methodology and strategies tied to specific U.S. News data metrics, which strategy was promoted internally by the Dean and other Fox personnel,” the investigation found. “The environment fostered by the school’s emphasis on rankings contributed to the reporting of inaccurate information to U.S. News. Moreover, the Dean’s focus on rankings, coupled with his personal management style, caused Fox personnel who interacted with the Dean on ranking-related matters to feel pressure to perform in this regard.”

Incensed, Porat would ultimately file a $25 million defamation suit in May of 2019 against his former school and President Englert, an action that would unwittingly result in a series of depositions and disclosures of records that would would help the FBI and the U.S. Attorney General bring their case before a grand jury.

‘TEMPLE TOOK AWAY THE JOB I LOVED, DAMAGED MY HEALTH, AND DESTROYED MY REPUTATION’

“The administration at Temple took away the job I loved, damaged my health, and destroyed my reputation and the legacy of my life’s work I spent decades building,” Porat said in a lengthy statement when he filed his lawsuit. “They did this with a false narrative invented for its expediency in public relations — and to deflect attention from the University’s own role in all of this. I have been made a scapegoat.”

It took a team from the FBI, the US Department of Education Office of Inspector General, and the Postal Inspection Service several years to unravel the fraud. The indictment charges Porat with one count of conspiracy to commit wire fraud and one count of wire fraud. Gottlieb and O’Neill have each been charged with one count of conspiracy to commit wire fraud. If convicted, Porat faces a maximum possible sentence of 25 years in prison, followed by three years of supervised release, and a $500,000 fine. Gottlieb and O’Neill each face a maximum possible sentence of five years in prison, followed by three years supervised release; and a $500,000 fine.

“Moshe Porat knew that burnishing the MBA programs’ rankings would make Fox more competitive, bringing in more students and more dollars,” said Lilian S. Perez, assistant special agent in charge of the FBI’s Philadelphia Division in a statement. “Fudging the school’s data was a means to that end. But countless applicants, students, and donors made big decisions, financial decisions, based on the lies at the heart of this alleged conspiracy. This was an extended and extensive fraud, for which those involved must be held accountable.”

THE FORMER DEAN ‘LOOKS FORWARD TO DEFENDING HIMSELF’

Despite the mounting evidence against him, Porat seems determined to fight the charges until the end. His lawyer issued a statement Friday. “We are disappointed that, after cooperating with the government in its investigation, the United States Attorney’s Office decided to bring these charges, which Dr. Porat vigorously denies,” wrote Porat’s attorney Michael A. Schwartz.

“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. He looks forward to defending himself against these charges and to clearing his name.”

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