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College Financial-Aid Loophole: Wealthy Parents Transfer Guardianship of Their Teens to Get Aid


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7/31/2019

College Financial-Aid Loophole: Wealthy Parents Transfer Guardianship of Their Teens to Get Aid

Education Department, universities are investigating the practice, which has been used in the Chicago area


The University of Illinois is looking into the guardianship issue. Here, a view of the University of Illinois at Urbana-Champaign campus.
 PHOTO: JEFFREY GREENBERG/UNIVERSAL IMAGES GROUP/GETTY IMAGES

By 
Douglas Belkin

CHICAGO—Amid an intense national furor over the fairness of college admissions, the Education Department is looking into a tactic that has been used in some suburbs here, in which wealthy parents transfer legal guardianship of their college-bound children to relatives or friends so the teens can claim financial aid, say people familiar with the matter.

The strategy caught the department’s attention amid a spate of guardianship transfers here. It means that only the children’s earnings were considered in their financial-aid applications, not the family income or savings. That has led to awards of scholarships and access to federal financial aid designed for the poor, these people said.

Several universities in Illinois say they are looking into the practice, which is legal. “Our financial-aid resources are limited and the practice of wealthy parents transferring the guardianship of their children to qualify for need-based financial aid—or so-called opportunity hoarding—takes away resources from middle- and low-income students,” said Andrew Borst, director of undergraduate enrollment at the University of Illinois. “This is legal, but we question the ethics.”

One Chicago-area woman told The Wall Street Journal that she transferred guardianship of her then 17-year-old daughter to her business partner last year. While her household income is greater than $250,000 a year, she said, she and her husband have spent about $600,000 putting several older children through college and have no equity in their home, which is valued at about $1.2 million, according to the property website Zillow. She said she has little cash on hand and little saved for her daughter’s education.

Transferring her daughter’s guardianship was largely a matter of paperwork, the mother said. Her business partner attended a court hearing with an attorney. She, her husband and her daughter didn’t even need to show up, she said. Once the guardianship was transferred, the teen only had to claim the $4,200 in income she earned through her summer job, the mother said.

Today, her daughter attends a private college on the West Coast which costs $65,000 in annual tuition, she said. The daughter received a $27,000 merit scholarship and an additional $20,000 in need-based aid, including a federal Pell grant, which she won’t have to pay back. The daughter is responsible for $18,000 a year, which her grandparents pay, the woman said.

The woman and another Chicago-area parent who spoke to the Journal said they followed the strategy laid out by a college consultant company called Destination College, based in Lincolnshire, Ill. The company says on its website it has saved families as much $40,000 a year per student. The website doesn’t specify how.

The owner of the company, Lora Georgieva, didn’t respond to requests for comment. Other people who said they are clients of the firm and spoke to the Journal said they were asked to sign a confidentiality agreement to not disclose her strategy of transferring guardianship.

The Education Department is looking at such transfers through its investigative arm, its Inspector General Office, said a person familiar with the matter. The office has suggested that the Education Department add clarifying language to the Federal Student Aid handbook. The suggested language, this person said, is: “If a student enters into a legal guardianship, but continues to receive medical and financial support from their parents, they do not meet the definition of a legal guardianship and are still considered a dependent student.”

The Journal’s review of more than 1,000 probate court cases filed in 2018 in Lake County, Ill., turned up 38 cases in which a judge granted the transfer of guardianship to a teenager in his or her junior or senior year of high school. Most of the families live in homes valued around $500,000. Several of those homes were valued at more than $1 million, according to property sites including Zillow.

In court documents, a petitioner is asked why he or she should become a guardian. Nearly all of the 38 cases use some version of this language: “The guardian can provide educational and financial support and opportunities to the minor that her parents could not otherwise provide.”

Mari Berlin is one of the attorneys at the Chicago firm of Kabbe Law Group who has represented about 25 families who have transferred guardianship for the purposes of securing independent student status, which can generate more financial aid.

“The guardianship law was written very broadly,” Ms. Berlin said. “Judges were given an immense amount of discretion. The standard is, best interest of the child, and I think it’s hard to argue that this is not in the student’s best interest.”

The University of Illinois notified the Education Department last year after a teenager mentioned the strategy to her high-school guidance counselor in suburban Chicago. The counselor notified the University of Illinois, where the student had applied, Mr. Borst said.

On her admissions application, the student indicated she lived with her parents in an affluent Chicago suburb, but on her financial-aid application she said she was independent, a university financial-aid officer discovered. That made the student eligible for thousands of dollars in need-based aid from the federal government, the state of Illinois and the university, Mr. Borst said.

Admissions officers found 15 students whom they had accepted who had recently legally transferred guardianship. The school said it will likely withhold institutionally funded need-based aid “until we are satisfied that students who have transferred guardianship don’t have other financial resources available,” Mr. Borst said.

Apart from the university aid, the students each are receiving up to $11,785 in state and federal aid, he said.

“They are gaming the system, whether it is legal or not doesn’t make it any less unsavory,” said Justin Draeger, CEO and president of the National Association of Student Financial Aid Administrators.

A man who says he is a client of Destination College said his mother became the guardian of two of his daughters, including one who will attend college this fall. His daughter received need-based aid at some schools but not at others, he said.

The issue of gaming college admissions entered the public realm this year when William “Rick” Singer, CEO of an admissions consultancy, was charged for running a scam in which he helped students cheat on their college entrance exams and bribed college athletic coaches to get students into elite universities. Mr. Singer has pleaded guilty to four felonies and is cooperating with the case that includes charges against 51 total, including 34 parents.


Source: https://www.wsj.com/articles/college-financial-aid-loophole-wealthy-parents-transfer-guardianship-of-their-teens-to-get-aid-11564450828





6/28/2019

花25萬送子進南加大 老爸認了錄取詐欺罪

(World Journal) 編譯孫梁

用25萬元把兒子作為體育特長生送進南加州大學的男子比扎克,28日對詐欺圖謀錄取的指控認罪。(路透)

用25萬元把兒子以體育特長生送進南加州大學的男子,28日成為被控在大學錄取中行賄和造假的第51個人;59歲的比扎克(Jeffrey Bizzack)對詐欺陰謀錄取的指控認罪。

檢方今年3月逮捕數十個名流家長和多所菁英大學的體育教練,指控他們通過賄賂和造假來幫助子女被名校錄取。

比扎克造假兒子為排球運動員的證明,但律師強調,比扎克是主動投案,並願意為他的賄賂和造假承擔責任。

律師說:「比扎克對他的所為深感後悔,尤其是對兒子造成的影響,但兒子對父親的行為一無所知。比扎克需用實際行動來彌補他的錯誤,並向南加大及其學生道歉。」

聯邦檢方將建議對比扎克量刑九個月。


http://www.cinfoshare.org/education/virginia-debate-academy

比扎克報住加州索拉納海灘鎮(Solana Beach),他把20萬元打入一個大學錄取顧問的虛假慈善帳戶,並給南加大體育中心開出5萬元的支票,以便將兒子錄取為校排球隊員。比扎克的兒子於2018年3月被大學錄取。

大學錄取顧問辛格(Rick Singer)每月從虛假慈善帳戶提取2萬元,送給南加大的體育主任唐娜·海內爾,由她幫助錄取比扎克的兒子和其他名流的後代,但海內爾不認罪。

辛格去年開始與檢方合作以減緩刑期,協助提供了指控家長的證據,並於今年3月認罪。

檢方表示,先後有14名家長認罪錄取詐欺,包括賄賂體育教練和更改考試分數。女星費麗西蒂·霍夫曼(Felicity Huffman)承認,她花了1萬5000元幫女兒更改了大學錄取的考試題。

在這一大學錄取賄賂與考試作弊案中,史坦福大學的帆船教練萬德穆爾是第一個被判刑的人,但他避免了牢獄之災,獲釋後的兩年將接受居住監管,包括佩戴電子監視器和在家軟禁六個月,並支付1萬元罰款。





5/19/2019

"斯坦福大学舞弊案"中 竟还有学生冒充黑人


  北京时间5月19日讯,据两位知情人士透露,在近日“斯坦福大学入学舞弊案”中,该计划的幕后推手还建议一些家庭谎称学生是少数族裔,利用校园多元化的政策支持。该计划旨在通过考试作弊和伪造体育证书,帮助富裕学生进入这所精英大学。

  知情人士说,美国加州门洛帕克的马乔里-克拉珀(Marjorie Klapper)的一个儿子在他的通用申请表上被错误地列为黑人和西班牙裔。克拉珀的父母因参与该计划定于周五认罪。

  美国联邦调查局在该案中提交的一份书面证词显示,大学顾问威廉-“里克”-辛格(William “ Rick ” Singer)也安排了一名监考官在这名青少年的ACT入学考试中作弊。辛格已同意认罪,目前正在等待判决。其中一位知情人士说,辛格经常让家长选择歪曲种族,他会说不这样做会让孩子处于“竞争劣势”。

  辛格希望把一个十几岁的孩子呈现为少数族裔,这是在利用大学录取过程中的一个热点问题,这个问题已经引发了无数诉讼:大学里一些重要决定额外考虑了某些种族或族裔的学生,甚至给予了他们优先权。

  实行种族歧视招生政策的学校表示,他们这样做是为了为所有学生提供更丰富的学习环境,并遵循最高法院允许这种做法的先例。

哈佛大学(Harvard University)也面临一场民事诉讼,指控其歧视学生。原告称,哈佛大学对亚裔申请人的标准高于其他种族的申请人。



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  哈佛否认了这一指控,称其采用了一种全面的方法和一系列复杂的因素来发放录取通知书。申请者可以在“通用申请表(Common Application)”的某一栏打勾,标出自己的种族或民族。“通用申请表”已被全美数百所学校接受。

  一位熟悉辛格公司的人士说,在辛格公司处理的一些申请中,申请人可能声称自己是少数族裔,尽管申请人与少数族裔关系寥寥,比如自称是印第安人的远亲。这位知情人士说,在一个案例中,一个十几岁的孩子被描述成印第安人,而“这个孩子完全没有印第安人的特征”。

  据两位熟悉辛格咨询业务的人士说,辛格的员工经常代表客户提交最终申请。

  在大学申请表上撒谎不一定是犯罪,但可能会引发学校的纪律处分。在大学入学考试作弊计划中被指控的父母面临着与辛格经营活动中的贿赂或考试作弊有关的指控。

  美国大学招生咨询协会(National Association for College Admission Counseling)主席斯蒂芬妮-奈尔斯(Stefanie Niles)说,大学都希望学生是诚实的,因此很难发现那些谎报种族的申请者。

  她说:“你可以让一个学生看起来是白人,但他是多种族的。”奈尔斯补充说,申请者不太可能在复选框中打错勾。她说,通用申请程序会提示那些选择了种族类别的学生,然后在确认他们选择的其他框中打勾。

  今年3月,辛格承认了四项罪行,检察官暗指申请者利用了他们假定的优势。

  美国助理检察官罗森(Eric Rosen)列出了辛格的计划,包括“在学生的种族和其他个人信息上撒谎,试图利用平权行动和其他项目带来的好处。”辛格在听证会上也承认这些指控。

  这起案件的公开法庭文件中没有具体提到不诚实的种族歧视指控,此前也没有报道过相关细节。






4/12/2019

華商捲入招生賄賂案 陳愛辛被加控洗錢、詐欺 最高可判40年

(World Journal) 記者劉晨懿之


好萊塢資深女星蘿瑞羅夫林(右)的19歲女兒奧莉薇亞潔德(左,Olivia Jade),大學入學過程遭聯邦檢察官查出涉嫌行賄詐騙。(美聯社)


涉案加州華人陳愛辛3月29日首次出庭。(美聯社)

聯邦檢察官9日宣布,對好萊塢女星蘿瑞羅夫林(Lori Loughlin)夫婦、加州華商陳愛辛(I-Hsin “Joey” Chen,音譯)等16名名校招生舞弊案被告,追加陰謀詐欺和洗錢指控。這些被告之前已被指控共謀從事郵電詐欺 ,但暫未認罪。上述指控每項均可判處多達20年監禁。

根據聯邦檢察官勒林(Andrew E. Lelling)辦公室資料,蘿瑞羅夫林和她的時裝設計師丈夫Mossimo Giannulli,以及來自加州Newport Beach的陳愛辛等16名被告,將就新指控擇日再度上庭。新的起訴書指出,這些被告通過大學入學顧問辛格(Rick Singer)聲稱的慈善和營利企業,共謀洗錢(清洗賄款和其他款項)來進行詐欺行為;跨境匯款入美國,用於推廣詐欺計畫。

根據檢方資料,這些被起訴的父母疑似向辛格所設立的組織和公司捐款或付款,來幫子女提高入學考試分數或買通學校校隊教練,進行招生舞弊。



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法院資料顯示,居住在加州橙縣新港灘市的陳愛辛,被控在2018年4月,通過賄賂手段,讓一名聲稱監督他兒子ACT考試的考場人員,協助修改答案。而陳愛辛的兒子和本案另一名被告的女兒,同一天在西好萊塢測試中心(West Hollywood Test Center)參加考試,結果陳愛辛兒子在36分滿分的ACT考試中考了33分。

2018年4月16日前後,陳愛辛向辛格支付了7萬5000元作弊代考勞務費,這筆錢存入「The Key」的銀行帳戶後,辛格同意向陳愛辛提供一張假發票,表明該款項是為其業務提供「諮詢」服務。此時聯邦調查局已展開釣魚行動,透過一號合作證人、已認罪的辛格,將陳愛辛的犯案罪名坐實。

聯邦調查局指導辛格分別在2018年10月和2019年2月,兩次與陳愛辛電話溝通,辛格假稱他運營的慈善基金會被國稅局查帳,而套話讓陳愛辛在電話中承認賄賂及明確當中過程。


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另據法院資料,蘿瑞羅夫林夫婦疑似花費50萬元,通過辛格讓兩名女兒進入南加州大學。儘管這對夫婦的兩名女兒從未參加過划船專業運動,但辛格在受賄後,讓兩人成為南加州大學女子划船隊隊員。

「紐約時報」報導,在電視劇歡樂滿屋(Full House)中扮演「Aunt Becky」一角而出名的蘿瑞羅夫林,因涉案遭Hallmark頻道停播此劇。蘿瑞羅夫林的兩個女兒也受到影響,南加州大學已對所有與此案相關的學生處置停課,禁止他們登記課程。

涉及該案共有33名家長,另一名好萊塢女星佛莉西霍夫曼(Felicity Huffman)及另外12名家長,4月8日已同意對觸犯一項共謀從事郵電詐欺認罪。






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4/12/2019

Newport Beach Dad Slammed With New Charges In College Scandal

A Newport Beach man was hit with new charges as prosecutors go after parents who failed to reach a deal in the college admissions scandal.

By Paige Austin, Patch Staff
Actress Lori Loughlin and Mossimo Giannulli, are among those facing new indictments in the college admissions scandal. (AP Photo/Steven Senne)

NEWPORT BEACH, CA — Prominent Newport Beach businessman I-Hsin "Joey" Chen was slammed by federal prosecutors with additional charges in the college admissions cheating scandal Tuesday, a day after he failed to join other parents in agreeing to plead guilty. Now, he and 15 other parents including "Full House" actress Lori Loughlin have been indicted Tuesday on conspiracy and money-laundering charges stemming from the wide-ranging scandal.

The strong-arm prosecutorial tactics come as many parents are being pressured to cut deals. On Monday, Golden Globe-winning actress Felicity Huffman admitted wrongdoing and agreed to plead guilty in a deal that is likely to mean jail time for the "Desperate Housewives" star.

In the new indictment announced by federal prosecutors in Boston, the parents all face the added charge of conspiracy to commit money laundering. Prosecutors said the 16 parents charged allegedly conspired to launder bribes paid to admitted ringleader William Singer — a Newport Beach businessman — "by funneling them through Singer's purported charity and his for-profit corporation."



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Loughlin and other parents now indicted on the money-laundering charge could find themselves facing heftier prison terms. Among those named in the new indictment were I-Hsin "Joey" Chen, 64, of Newport Beach; Douglas Hodge, 61, of Laguna Beach; Michelle Janavs, 48, of Newport Coast; and Homayoun Zadeh, 57, of Calabasas.

The charge of conspiracy to commit money laundering carries a maximum sentence of 20 years in prison, three years of supervised release and a fine of $500,000. The fraud-conspiracy charge also carries a maximum 20-year prison term, three years of supervised release and a fine of $250,000.

Chen, who works in the shipping industry, allegedly paid $75,000 for help cheating on his son's college admissions test, according to court documents. 

Fifty people across the country, including parents and some college athletics coaches, have been implicated in the scandal, and some have already struck plea deals with prosecutors, including Huffman.


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Loughlin, 54, and her husband, fashion designer Mossimo Giannulli, 55, were originally charged with conspiracy to commit mail fraud and honest services mail fraud for allegedly paying $500,000 to have their daughters admitted to USC by portraying them as recruits to the university's crew team, even though neither had ever participated in the rowing sport.

Huffman, one of the most high-profile parents caught up in the scheme, will plead guilty for agreeing to pay at least $15,000 to bolster her oldest daughter's score on the SAT exam. She is among 13 parents who have agreed to plead guilty in the scheme. Huffman has agreed to plead guilty to one count of conspiracy to commit mail fraud and honest services mail fraud. 

As with many of the dozens of parents indicted, Huffman is in a tight spot. The admitted ring-leader of the bribery and cheating scheme had turned on his various clients, cooperating with prosecutors and tricking parents, including Huffman, into discussing the alleged crimes on phone calls that were secretly being recorded by investigators.

Defense attorney Manny Medrano told the Los Angeles Times Tuesday that based on 2019 federal sentencing guidelines, Huffman would likely face four to 10 months in prison as part of her plea deal.




The case against Loughlin and Giannulli includes emails between the couple and Singer allegedly scheming to cheat the system, according to court records.

Legal experts predicted that parents reluctant to cut deals would likely find themselves facing additional charges. Still, the likelihood of jail time may have made some the wealthy and famous defendants willing to risk a trial.

"These cases aren't about defense, they are about mitigation," said Neama Rahmani, a former assistant U.S. attorney told the Times. "If a defendant stays in, they are getting bad advice from their lawyers. These are bulletproof cases. As an attorney, it is about finding the best way to reach a plea with the government with a reduced sentence."

Singer pleaded guilty last month to charges including racketeering conspiracy and obstruction of justice.


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Several coaches at local universities were arrested in connection with the alleged $25 million scheme. Federal prosecutors said the conspiracy involved wealthy parents who would pay thousands of dollars to get their children admitted to prestigious universities by passing them off as recruited athletes — regardless of their athletic ability — or by helping them cheat on college entrance exams.

Federal prosecutors said that in some cases, the ruse over fake athletic recruiting included the use of staged or faked photos of the students posing with athletic equipment or appearing to compete in sports they did not actually play.

Athletic coaches from USC, UCLA, Yale, Stanford, Wake Forest and Georgetown, among others, were implicated in the scheme, as well as parents and entrance-exam administrators.

There was no indication that the schools themselves were involved in the scheme.

When federal authorities announced the indictments, USC announced that two of its employees implicated in the scandal — water polo coach Jovan Vavic and senior associate athletic director Donna Heinel — had been fired. UCLA men's soccer coach Jorge Salcedo was placed on leave but later resigned.


City News Service and Patch Staffer Paige Austin contributed to this report.


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