Ruling in college admissions scam could reduce prison time

A federal judge’s coming ruling in the college admissions scandal could determine whether the wealthy parents in the case get significant prison time — or whether they only get a slap on the wrist.

The issue centers around two key questions: Who were the victims in the scheme, and how much money did they lose?

Prosecutors have said the victims are the universities and testing companies, and that the amount that the parents paid in the fraud should be used as a substitute for the victims’ losses. Parents who paid more in bribes should face harsher penalties, they argue.

But the US Probation and Pretrial Services, which prepares pre-sentence investigation reports for each defendant, say that the universities and testing companies suffered no monetary harm at all. The price of the parents’ bribes is therefore not relevant to any sentences, the office argued.

Federal court Judge Indira Talwani heard arguments on this debate in federal court Tuesday. She is expected to make a decision before actress Felicity Huffman’s expected sentencing hearing on Friday.

If Talwani sides with the probation office’s arguments, the parents implicated in the case — including Huffman and actress Lori Loughlin — could face shorter possible prison sentences or even just probation.

Loughlin has pleaded not guilty to charges of conspiracy to commit fraud and conspiracy to commit money laundering. Each charge is punishable by up to 20 years in prison.

A decision against prosecutors would also undermine their continued emphasis on sending these parents to prison to try to show that no one is above the law.

“(No) other form of sanction makes plain that all Americans are equally obligated to play by the rules and must be equally accountable for breaking them,” US Attorney Andrew Lelling wrote in a recent filing.

“Home confinement would be a penological joke, conjuring images of defendants padding around impressive homes waiting for the end of curfew; probation with community service is too lenient and too easily co-opted for its ‘PR’ value; and a fine is meaningless for defendants wealthy enough to commit this crime in the first place,” Lelling wrote.

Of the more than 50 parents, coaches, test administrators and conspirators in the case, only one has been sentenced so far. Former Stanford sailing coach John Vandemoer was sentenced to two years supervised release — but no prison time.

A technical debate with big implications

The legal debate featured in court on Tuesday is related to the defendants’ offense level in the federal sentencing guidelines, which provide a range of possible punishments. Judges are not required to follow these guidelines.

More than 30 parents have been charged for allegedly conspiring with scam mastermind Rick Singer to cheat on standardized tests or bribe college coaches to get their children an advantage in the admissions process. Over a dozen of those parents, including Huffman, have already pleaded guilty to a single count of conspiracy to commit fraud.

These parents signed plea deals in which federal prosecutors agreed to recommend they get prison time at the low end of the federal sentencing guidelines range. In fraud cases, those ranges are more serious based on the cost of the fraud. Generally, the more money a victim loses in a fraud, the harsher the prison sentence.

Huffman, for example, admitted to paying $15,000 to rig her daughter’s SAT test. Another parent, Stephen Semprevivo, admitted to paying $400,000 to get his child into Georgetown University under the guise that he was a tennis recruit. The plea deals use the respective totals to calculate how much prison time they should receive, so Semprevivo is facing a harsher sentence than Huffman.

But in the admissions scam, the fraud losses are more ephemeral, CNN legal analyst Elie Honig said. Fraud cases usually have clear monetary losses that play a role in the sentencing calculations, but that’s not clear in the college admissions scam.

“Here the amount paid in bribes is $15,000, but who exactly lost $15,000?” Honig said.

“It’s not your traditional fraud loss calculation,” he added.

In court on Tuesday, Judge Talwani pressed prosecutors and said that she needed to determine the amount of the loss suffered by victims in the case.

“It’s clearly impossible to divide up by person,” US Attorney Eric Rosen responded.

In a court filing, prosecutors have said the precise amount that the universities and testing companies lost is “difficult or impossible” to calculate.

Still, they said USC and Georgetown lost the value of their employees’ honest services, the cost of internal investigations, and the loss to their reputations, which could mean they see fewer applications in the future. In addition, they said the testing companies lost wages to corrupt proctors, lost the cost of internal investigations, and lost revenue from fewer students taking exams.

However, an attorney for Semprevivo, one of the parents in the case, said these losses are “either non-existent or speculative.”

Whatever Talwani decides, Huffman is expected to be the first parent to be sentenced in the case in a hearing on Friday. Ahead of her sentencing, Huffman wrote to the court that she regrets paying $15,000 to cheat on her daughter’s SAT test.

“In my desperation to be a good mother I talked myself into believing that all I was doing was giving my daughter a fair shot,” the letter said. “I see the irony in that statement now because what I have done is the opposite of fair. I have broken the law, deceived the educational community, betrayed my daughter, and failed my family.”

CNN’s Mark Morales contributed to this report.