Friday, October 30, 2020

Former CEO of Investment firm Pimco jailed for 9 months in college admission bribery scandal

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The former CEO of one of the world’s largest investment management companies was sentenced Friday to nine months in prison for using fraud and bribes to try to get five of his children into exclusive colleges as fake athletic recruits, the US District Attorney’s Office in Massachusetts said.

Douglas Hodge, who led the Pacific Investment Management Company, agreed to use Rick Singer’s college admissions “side-door” scam for five of his children, paying bribes totaling $850,000 over the course of a decade, according to prosecutors.

 

Prosecutors had asked that he be sentenced to 24 months in prison. The nine-month sentence is the longest of any parent charged in the case, surpassing the six-month sentence given in November to Toby MacFarlane, who also pleaded guilty. By comparison, actress Felicity Huffman was sentenced to just two weeks in prison for her admitted role in the scam.

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Two of Hodge’s children were accepted to Georgetown University as false tennis recruits, two children were accepted to the University of Southern California as a false soccer recruit and a false football recruit, and Hodge attempted to use bribes to get a fifth child into Loyola Marymount University, according to prosecutors.

 

Douglas Hodge, former CEO of PIMCO, exits federal court on October 21, 2019, in Boston.

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Hodge also lied to the IRS by deducting these bribe payments from his income taxes as purported charitable donations, prosecutors said in a sentencing memo.

 

Hodge initially fought the charges in the case, but in October he agreed to plead guilty to conspiracy to commit mail and wire fraud and money laundering conspiracy. His attorneys asked for a sentence at the low end of the sentencing guidelines range, comparable to other parents who received sentences measured in weeks.

 

“Doug participated in Rick Singer’s process not out of ego or a desire for self-aggrandizement, but rather out of love for his children and an overriding, but misguided desire to be helpful to them,” his attorneys wrote in their sentencing memo.

 

Hodge spent 28 years at Pimco, one of the largest money managers in the world, and served at least two as CEO. He left in 2017.

 

Singer, the mastermind of the sprawling scam, has pleaded guilty to racketeering conspiracy and other charges.

‘Obviously we have stretched the truth’

According to the criminal complaint released last year, Singer forwarded to Hodge two falsified athletic profiles for one of Hodge’s sons. One of the profiles portrayed him as a star football player and the other portrayed him as a star tennis player.

 

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“Obviously we have stretched the truth but this is what is done for all kids. Admissions just needs something to work with to show he is an athlete,” Singer wrote in an email, according to the complaint.

 

His son was accepted to USC as a football recruit, but he did not actually join the team, the complaint says. In exchange, Hodge paid USC athletics official Donna Heinel a $75,000 check payable to the USC “Womens Athletic Board,” $125,000 to Singer’s business The Key and $125,000 to Singer’s fake charity Key Worldwide Foundation.

 

In a November 30 recorded phone call made at the direction of investigators, Singer and Hodge agreed to lie to the IRS to cover up their crimes, prosecutors said.

 

“So you don’t have to worry. I’m not going to– I’m not– I’m not going off script here,” Hodge said in the call, federal records show.

 

 

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