Chief Launderer in College Admissions Scam Plans to Cooperate

(Bloomberg) -- The chief financial officer of the firm behind the U.S. college admissions scandal has agreed to plead guilty to racketeering charges and cooperate with federal prosecutors in their investigation, according to documents filed in court Friday.

Steven Masera, 69, helped William “Rick” Singer, founder of the Newport Beach, California, college-counseling firm and the admitted mastermind of the scam, launder fees that clients paid to fix their children's college-entrance exams and bribes for university sports coaches to designate the kids as recruited athletes, according to prosecutors. The cash was funneled through a sham charity, the Key Worldwide Foundation.

Masera sent bills to the parents, whose children were admitted to prestigious schools including Yale, Georgetown, Stanford and the University of Southern California. His crimes involved laundering $9.5 million to $25 million, the government claims. No students or colleges have been charged.

In the case against actor Lori Loughlin and her husband, designer Mossimo Giannulli, Masera sent the parents an invoice in 2017 seeking payment of $200,000 one week after one of their daughters was accepted to USC, investigators say.

“Thank you for your pledge to The Key Worldwide Foundation,” the bill read, according to an FBI affidavit. “Your pledge is now due. ... Our receipt letter will go out to you upon full payment.”

Prosecutors have agreed to recommend that Masera, of Folsom, California, serve on the low end of 57 to 71 months in prison, according to a May 14 letter filed in court Friday. The U.S. also has agreed to give him immunity from prosecution for information he provided in an April 10 letter in hopes of leniency in sentencing.

It isn't clear from the cooperation agreement what Masera could tell prosecutors that they don't already know or whether it might lead to more arrests.

David H. Thomas, a lawyer for Masera, didn't immediately respond to a request for comment.

Masera's is the latest agreement to plead guilty in the biggest college admissions scandal ever prosecuted by the Department of Justice. Four coaches and 13 parents have pleaded guilty in the case.

Another 19 parents, including Loughlin and Giannulli, are fighting the charges against them. Pre-trial hearings are scheduled for Monday in federal court in Boston.

Singer, who also cooperated with prosecutors, is due to be sentenced Sept. 19.

To contact the reporter on this story: Janelle Lawrence in Boston at jlawrence62@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey, Steve Stroth

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