This is Part 3 of an article series analyzing the U.S. federal implications of the college admissions and testing bribery scandal. This article examines the federal consequences for various parents who participated in the scandal through the lens of Lori Loughlin and Mossimo Giannulli. Part 1 provided an overview of important facts and background information. Part 2 delved into the specific charges against William “Rick” Singer, the mastermind of the entire scheme.
Starting in 2011 and ending in 2019, William “Rick” Singer masterminded a far-reaching federal conspiracy to corrupt the process of college testing and admissions. Now commonly referred to as the College Admissions Scandal, this criminal conspiracy implicated many wealthy parents who paid Singer to guarantee access to elite colleges and universities across the United States.
In addition to the federal charges against Singer, dozens of wealthy parents faced similar consequences for their involvement. Two of the most high-profile parents – actress Lori Loughlin and her husband, designer Mossimo Giannulli – were charged for fraudulently paying their children’s way into the University of Southern California as false athletic recruits.
Unlike other parents who secured plea deals immediately, Loughlin and Giannulli maintained their innocence and fought the charges. Initially, they both faced charges for conspiring to commit three crimes – mail and wire fraud, federal programs bribery, and money laundering.
But eventually, Loughlin and Giannulli reversed course and reached a plea agreement, becoming the 23rd and 24th parents to do so. In consideration for Loughlin and Giannulli pleading guilty, federal prosecutors dropped the charges of federal programs bribery and money laundering.
Ultimately, Loughlin pleaded guilty to one count of mail and wire fraud. Her plea deal included imprisonment for two months, supervised release for two years, fines of $150,000, and community service for 100 hours.
Giannulli also pleaded guilty to one count of mail and wire fraud. But his sentence was more severe, given his role in the College Admissions Scandal. Giannulli’s plea deal included imprisonment for five months, supervised release for two years, fines of $250,000, and community service for 250 hours.
While Loughlin and Giannulli serve out their sentences, the rest of this article will examine two of the most common charges parents faced in the College Admissions Scandal – mail and wire fraud conspiracy and money laundering conspiracy.
Mail and Wire Fraud Conspiracy
18 U.S. Code § 1341 details the federal laws against mail fraud, whereas 18 U.S. Code § 1343 provides the statute governing wire fraud. These two federal statutes are nearly identical, prohibiting any person from committing various fraudulent activities by means of mail, wire, television, or radio.
More specifically, Sections 1341 and 1343 prohibit any person from executing – or intending to execute – a scheme to fraudulently obtain money, property, or other things of value. Federal law also includes honest services as a valid object of mail or wire fraud. Additionally, attempts or conspiracies to commit these crimes are punishable in the same way as completed offense.
The true difference between these crimes is the method of execution. Mail fraud involves the Postal Service or other mail carriers. Wire fraud involves interstate communications via wire, television, or radio. Though in many cases, mail and wire fraud are often charged together.
Under federal sentencing guidelines, the maximum sentence for conspiracy to commit mail and/or wire fraud is imprisonment for 20 years, supervised release for three years, and fines up to $250,000 or twice the value of the gain or loss in question.
Money Laundering Conspiracy
18 U.S. Code § 1956 establishes the federal laws against money laundering. Under this section, it is illegal to knowingly conduct financial transactions with property or money obtained from unlawful activities. Moreover, Section 1956 treats conspiracies and attempts to commit money laundering in the same way as completed crimes.
Section 1956 is a broad statute that classifies a wide range of financial activities as money laundering. Though generally speaking, money laundering falls into one of three categories:
- Promoting criminal or otherwise unlawful interests;
- Disguising the true nature, source, or ownership of illegitimate money; or
- Avoiding legally required transaction or tax reporting such as failure to report more than $10,000 cash.
Under federal sentencing guidelines, the maximum sentence for conspiring to commit money laundering is imprisonment for 20 years, supervised release for three years, and fines up to $500,000 or twice the value of the laundered money in question.
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