- This episode of LegalEagle was made possible by Skillshare. Learn to think like a lawyer
for free for two months by clicking the link in the description. Schadenfreude is defined
as pleasure derived from another person's misfortune. But it should also be defined as watching a bunch of
entitled, rich parents get indicted for
fraudulently trying to get their stupid kids into college. So can I get some '90s sitcom music? (upbeat music) ♪ Ah, ah, ah, ah ♪ ♪ Ah ♪ ♪ What ever happened to a meritocracy ♪ ♪ The class rank, the GPA, even SAT ♪ ♪ Ah, ah ♪ ♪ Everywhere you look ♪ ♪ Everywhere there's a
fraud, there's a fraud ♪ ♪ A school to pay bribes to ♪ ♪ Everywhere you look ♪ ♪ Everywhere a white face ♪ ♪ Of somebody's who's mom's screwed ♪ ♪ Everywhere you look ♪ ♪ When your kid's not bright
just get on the phone ♪ ♪ They have a million
to get them enrolled ♪ ♪ Everywhere you look ♪ ♪ Ah, ah, ah, ah ♪ (vocalizing) - Hey LegalEagles, today
we're talking about the college admissions scandal. We're gonna mix things up a little bit because this story has everything. The rich and famous lots of bad things happening to bad people and RICO violations. So today we're gonna talk about the allegations in the indictment and we're also gonna
talk about what it means to have a RICO prosecution. So here's the background. 50 people including Full House actress Lori Loughlin AKA Aunt Becky and actress Felicity Huffman are facing federal RICO charges
for allegedly participating in an elaborate bribery scheme to get their children
into elite universities. There are a lot of rich
and famous people here but most people know about
Lori Laughlin from Full House so I'm going to refer to
defendants collectively as Aunt Becky. ♪ Bad boys, bad boys ♪
(audience laughing) ♪ Whatcha gonna do ♪ - In this case, the kingpin,
if you will, William Singer created a company called The Edge College and Career Network LLC also known as The Key,
ostensibly as a for-profit college counseling and
preparation business. He also started the Key
Worldwide Foundation or KWF as a 501(c)3 non-profit
for similar purposes. The government's indictment
alleges that Singer engaged in rampant racketeering or fraud that falls into three buckets. First the indictment alleges that Singer facilitated cheating on
the ACT and SAT exams in exchange for bribes. Number two, it alleges that
he designated applicants as purported recruits for
competitive college athletic teams without regard to whether the student had actually participated
in athletics at all. And number three, concealing
the nature and source of these bribery payments
by funneling the payments through the KWF charitable
foundation account. So let's talk about
the first type of fraud and racketeering that's
alleged in the indictment. The government's indictment alleges that to facilitate the cheating Singer counseled Aunt
Becky to seek extended time on her kids' exams by
having doctors falsely state that her children had
learning disabilities in order to obtain the
medical documentation required for the college board to grant extra time on
the standardized tests. - You're in big trouble, mister! - Additionally the indictment states that in exchange for bribery payments co-conspirators allowed Aunt Becky's kids to secretly take the ACT and
SAT tests in special rooms where they were given more time or the children's responses
were actually replaced with the correct answers. - If your children are accepted here you'll be expected to
work with them at home rather intensively so that they may reap the optimum benefits from our curriculum. - Oh, yeah, well our kids
love to reap. (chuckles) - In he second type of
fraud Aunt Becky paid Singer approximately $25 million dollars over the course of 2011 through 2019 to bribe coaches and
university administrators to designate her children
as recruited athletes or other favored admissions categories to jump the line into college. - We may have, well he may
have embellished, lied a bit on our application.
(audience laughing) - Honest, she's been on
this honesty kick all week. - Oh my God, you guys. The Skillshare plug at
the end of this video is going to be so epic. Aunt Becky often photoshopped
fake photos of her kids onto other athletes to make
the fraud seem more believable. And given that Aunt Becky lives in L.A. a lot of the fraud
concerned L.A. colleges. As a UCLA grad myself, it gives
me no pleasure to point out that this scandal appears to
permeate through the entire University of Southern California resulting in multiple
coaches at USC being fired. It gives me no pleasure
at all to point that out. None at all, none. And I have no idea why
people often refer to USC as the University of Spoiled Children. (laughing) Oh my God, I'm gonna
get in trouble for that but it's worth it. That takes me to the third type of fraud. Of course, most or all
of these bribery payments were labeled as charitable contributions. So essentially these million dollar bribes were subsidized by the federal government. In correspondence that
Singer sent to Aunt Becky in response to a purported
charitable contribution to KWF of $251,000, Singer stated that your generosity will allow us
to move forward with our plans to provide educational and
self-enrichment programs to disadvantaged youth. So to summarize, Aunt Becky
spent millions of dollars on bribes and fraudulent payments to get her kids into college got to write all of that amount off as a charitable deduction which effectively cuts the cost in half subsidized by other taxpayers
and got a letter saying that she was helping disadvantaged youth. You want class riots? Because this is how you get class riots. By the way, it's worthy noting
that all of this got started because one of the
participants wanted to get a lighter sentence for securities fraud. The SEC was investigating
a guy named Morrie Tobin a Los Angeles financial exec for a pump-and-dump investment scheme. He actually plead guilty to conspiracy to commit securities fraud and hasn't actually been charged in this particular
college admissions scandal but it appears that he
snitched on Aunt Becky to get a reduced sentence in that case. But let's talk about the RICO prosecution. If you follow Ken White on Twitter and you absolutely should he often says that it is never RICO. RICO is to Popehat what
lupus is to Dr. House. It's just never that. But this time it actually is RICO. RICO, or The Racketeer Influenced and Corrupt Organizations
Act, is a weird animal. I've handled a few RICO claims but always from the civil side
because I'm a civil attorney. But this is criminal RICO. Most people think about RICO prosecutions as being synonymous with, the
government is really serious and is bringing down the hammer. But that's generally wrong. It's also understandable because of the context in
which RICO usually appears. RICO was initially passed in the 1970s with the intent to pursue the Mafia. The idea behind RICO was to tie
all of their crimes together into one case which
allowed the prosecution to be able to connect the incidents allowing for convictions of the
bosses behind all the crimes with all of the underlings as well. It was necessary because it's really hard to prosecute the mob. Traditional tools like conspiracy
charges were hard to prove without direct links to
the upper mob bosses. So some would say that RICO is
written intentionally vaguely to capture enterprises like the mob that would otherwise evade prosecution. To this day, when prosecutors have traditional criminal law
tools available to use they often use those to avoid the convoluted issues of RICO. But in general, a properly
stated RICO claim requires one, conduct, two, of an
enterprise, three, a pattern and four, a pattern of
racketeering activity. Conduct here is pretty clear. Bribes, fraud, it's all over the place. The enterprise at issue here is The Key and all the participants
of that organization. A pattern under RICO
only requires two acts and here there are many more of that. And the element of racketeering
activity is extremely broad. The statute includes things
like kidnapping, gambling, arson, robbery, bribery, extortion and a list of a whole lot of other things. It's actually impossible to
have a racketeering claim without a finding that
the defendant is guilty of another criminal violation. Often this is called a RICO predicate. Here the RICO predicates
include mail fraud, wire fraud and money laundering. And interestingly, here
the ring leader Singer was a cooperating witness and basically went through
this Rolodex of co-conspirators calling up his old
acquaintances and saying hey, remember the fraud we did last year? You were a willing participant, right? (trombone squawking) Cool, cool. If the government proves up its case which it looks like it
should be able to do it should be a pretty
straightforward RICO prosecution. And a quick note about
the class action lawsuits that have been filed by other
students that didn't get in in the wake of this RICO prosecution. They're going to fail and
they're going to fail hard. The point of a class
action is to adjudicate a bunch of very similar
cases at the same time. And that just isn't the case here. First it would be nearly
impossible to prove that you were harmed, in other words, that you didn't get into college because of this other
fraud that was going on. It would also be nearly
impossible to prove that you were particularly
injured in a similar way to all of the other class members since admissions decisions
are on an individual basis. And on top of that, what
would your damages be? So these class action cases lack the commonality and typicality that is necessary for a
class action case to proceed. Unfortunately this RICO prosecution couldn't have happened to a nicer person. - I'm like excited to go prank my, like, do the school prank but I'm also literally never at school that I think my class doesn't even. Maybe they forget I go there. (laughs) I'm just kidding. - Olivia Jade clearly
got into USC on merit. Now what I don't understand
is why you would spend millions of dollars bribing
your way into college especially USC, when you could, you know, just be a better student. For example, you could
take Francesco D'Alessio's Skillshare class on how to
be a productive student. Francesco shows you how
to do all the things that Olivia Jade never learned,
like getting organized. - I don't really know
what my plan is today. I had a really late breakfast. It was at like 12:30-ish. - Planning ahead. - So, once again, I
didn't film anything today but I did get tan. - Becoming a super student. - I don't really care about
school as you guys all know. Skillshare is an online learning community that doesn't violate the RICO statute and has over 20,000 classes on everything like lifestyle, design and technology. The first 500 LegalEagles will get two free months of Skillshare when you click on the link below. Clicking that link really
helps out this channel. The free premium membership gives you unlimited access to must-know topics so you can improve your
skills and learn new things. So don't pay $251,000 when you can pay $8 per
month on Skillshare. - Hopefully I find motivation to do it because if I don't I'm
gonna be so made at myself. - Do you agree? Leave your objections in the comments and check out this playlist of
all my other real law reviews where I will see you in court.
This is fabulous— funny and informative