Wednesday, October 28, 2020

Venture capital CEO sentenced to 6 months for college admission scam

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Manuel Henriquez, who led a venture capital firm before being charged with paying $450,000 to rig his daughters’ college entrance exams and bribe a coach at Georgetown University, was sentenced Wednesday to six months in prison.

U.S. District Judge Nathaniel M. Gorton, ruling from Boston in a video conference, went beyond the five-month sentence requested by prosecutors, saying Henriquez’s “despicable” crimes made the financier, whose lawyers had lauded his support of children’s charities, “not only a felon but a hypocrite.”

Gorton also ordered Henriquez, 57, to pay a $200,000 fine and perform 200 hours of community service.

Gorton noted that Henriquez, who founded a publicly traded finance company and chaired it until his arrest, was “by all accounts, an intelligent, hardworking, very successful and very rich entrepreneur who has overcome many hardships.”

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“How in God’s name can you have come to this day?” he asked.

Gorton had previously sentenced Henriquez’s wife, Elizabeth, to seven months in prison. In court papers filed before Manuel Henriquez was sentenced, prosecutors said he was a “less active participant in the mechanics of the fraud” than his wife, who “gloated” after a Harvard-educated conspirator supplied her daughter with the answers to her SAT exam.

Elizabeth Henriquez is now serving her sentence at a federal prison in Dublin, Calif..

In a lengthy, tearful and stumbling address, Manuel Henriquez apologized to the judge, his daughters, wife, colleagues, friends and the college students whose parents, unlike himself, hadn’t spent a small fortune to fix their children’s chances of admission. He declared himself “humiliated, a broken man, a criminal and, as you rightfully said, a common thief.”

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“I will take these words to my grave — a common thief,” he sputtered.

The Henriquezes, who pleaded guilty to conspiring to commit fraud and money laundering, acknowledged paying William “Rick” Singer, a Newport Beach college admissions consultant, roughly $50,000 to fix their two daughters’ SAT, ACT and SAT subject tests on five occasions.

The couple paid Singer another $400,000 to secure the fraudulent endorsement of Gordon Ernst, a tennis coach at Georgetown, prosecutors alleged. In exchange for the bribe, they said, Ernst falsely portrayed the Henriquezes’ daughter to Georgetown’s admissions office as a top-notch tennis player.

“At her best,” an FBI agent wrote in an affidavit supporting charges against the girl’s parents, “she appears to have ranked 207th in Northern California in the under-12 girls division, with an overall win/loss record of 2-8.”

Ernst has pleaded not guilty to conspiring to commit racketeering, fraud and bribery.

When her daughter was admitted to Georgetown, Elizabeth Henriquez tapped out an email to Singer, obtained by investigators, saying she was “over the moon happy.”

“Now onto daughter number 2!” she wrote.

At a public high school in Houston, where he had bribed a teacher to turn a blind eye, Singer’s accomplice, Mark Riddell, gave the Henriquezes’ second daughter the correct answers to her ACT exam. She scored 30 points out of a possible 36.

Rather than paying Singer the agreed-upon price of $75,000 to rig the test, Manuel Henriquez, a prominent alumnus of Northeastern University in Boston, repaid Singer by helping ensure the child of another client was admitted to his alma mater, prosecutors said. The student’s family paid Singer $250,000.

Henriquez’s lawyer, Melinda Haag, portrayed him in court papers as a man broken — embarrassed, remorseful, “wracked with shame and regret,” she wrote. She laid out his life story: an impoverished, difficult childhood; an ascent to the heights of the financial world; and finally, his choice to conspire with Singer, break the law, and ruin his career and his reputation.

Henriquez worked at the Bank of Boston and several investment firms before founding his own company in 2003, Hercules Capital, headquartered in Palo Alto. He took the company public less than two years after its founding.

On the morning of March 12, 2019, Henriquez got a call from the FBI. Agents were fanning out in the country’s wealthiest enclaves — Los Angeles’ Westside, Manhattan’s Upper East Side and Greenwich, Conn., among others — to arrest Singer’s clients.

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Henriquez surrendered to U.S. marshals in Manhattan, his lawyer said. Within hours of being released, he called an emergency meeting with Hercules’ board, resigned as its chairman and “ceased day-to-day operational control,” Haag wrote. He no longer holds a role at the company, she said.

“The loss of Hercules Capital was like losing my third child,” Henriquez said in his letter to the judge.

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