Ex-CEO of Pimco to plead guilty in college admissions scandal

Douglas Hodge, the former chief executive of investment giant Pimco, is expected to plead guilty to an indictment charging him with conspiracy to commit fraud and money laundering, federal prosecutors in Boston said Thursday.

The expected plea is a sign some of the parents who have so far maintained their innocence in the college admissions scandal may be caving after months of legal wrangling and public scorn. Hodge, a resident of Laguna Beach, was accused of paying a total of $525,000 to have his daughter and son admitted to USC as phony soccer and football recruits.

Hodge’s forthcoming guilty plea, scheduled for Oct. 21, is significant. He is the first to signal an intention to plead guilty among a group of parents who, after balking at an early deal from prosecutors to plead to a single fraud conspiracy charge, were indicted on an additional charge of money laundering. That group of 19 parents includes actress Lori Loughlin and her husband J. Mossimo Giannulli, a fashion designer.

Hodge’s apparent reversal comes after eight parents, who agreed in April to plead guilty to the single fraud conspiracy charge, were sentenced to prison terms ranging from 14 days for actress Felicity Huffman to five months for Agustin Huneeus Jr., a Napa vintner. A ninth parent, Peter Jan Sartorio, was spared prison and punished instead with a fine and community service.

Four more parents will be sentenced in the coming weeks.

Hodge, who was accused of using Singer’s athletic recruiting scam twice, was seen as potentially facing far more time in prison than parents who paid Singer to fix their children’s SAT and ACT exams.

Though Hodge’s case is before a different judge, U.S. District Judge Indira Talwani, who has sentenced nine parents in the scandal, has indicated she views the athletic recruitment scam as more egregious, and more deserving of prison, than the test-rigging scheme.

Hodge’s attorney declined to comment.

Prosecutors allege that Hodge, who led Pimco from 2014 to 2016, maintained a criminal relationship from 2012 to 2015 with William “Rick” Singer, the Newport Beach consultant who has admitted orchestrating the decade-long admissions scheme that breached such elite universities as Stanford, Yale and Georgetown.

Pimco, a bond management firm based in Newport Beach, has acknowledged inviting Singer to speak with employees about his legitimate tutoring and college counseling services. Singer for years operated an above-board college counseling service, the Edge College and Career Network.

Hodge paid Singer $200,000 to misrepresent his daughter to USC as a soccer standout — co-captain of “a Japanese national soccer team” and an “All-American midfielder” — which helped secure her admission to the school in 2013 as a recruited athlete, according to charging documents filed in federal court.

Singer wired $100,000 to two USC soccer coaches, Ali Khosroshahin and Laura Janke, who were complicit in the scheme, according to an indictment returned by a grand jury in April. Both coaches pleaded guilty to racketeering conspiracy and are cooperating with prosecutors.

Hodge’s daughter matriculated at USC in 2013, but never played soccer for the school, prosecutors said.

In 2014, Hodge paid another $325,000 to ensure his son was admitted to USC as a bogus football player, prosecutors said. After creating two fake profiles for Hodge to submit to USC — one presenting his son as a football player, the other as a tennis standout — Singer told Hodge in an email, “Obviously we have stretched the truth but this is what is done for all kids,” the indictment says.

“Admissions just needs something to work with to show he is an athlete,” Singer continued, according to the indictment. “They do not follow up after Donna presents,” referring to Donna Heinel, then the third-ranking official in USC’s athletic department.

At Singer’s direction, the indictment says, Hodge wrote a $75,000 check to a USC account controlled by Heinel, who presented Hodge’s son to an admissions subcommittee as a football recruit.

Heinel has been charged with conspiracy to commit racketeering and was fired by USC. She has pleaded not guilty, and her attorney on Wednesday asked a judge to dismiss the indictment, calling it a “poor attempt to paint this matter as an organized criminal enterprise rather than what it truly is — parallel, uncoordinated acts with William ‘Rick’ Singer.”

Singer also paid $50,000 to a bank account controlled in part by Janke, who created the fake profiles for Hodge’s son, the indictment says.

Hodge’s son was admitted to USC as a football recruit in 2015. It’s unclear from court records whether he enrolled at the school.