Judge sentences ex-CEO to longest prison term in college admissions scandal, decries 'appalling' actions
Joey GarrisonBOSTON – A federal judge Friday sentenced Douglas Hodge, a former CEO of a major investment management firm, to nine months in prison for paying $850,000 over more than a decade to get four of his children admitted to elite private universities as fake athletic recruits.
It marks the longest prison sentence so far in the nation's college admissions scandal, topping a six-month sentence handed down to a parent in November.
Hodge, former CEO of Pacific Investment Management Company, Pimco, benefited more from the elaborate admissions scheme led by Rick Singer than any parent sentenced to date in the blockbuster "Varsity Blues" case, prosecutors said.
Before delivering his sentence, U.S. District Judge Nathaniel Gorton made Hodge stand and excoriated the business executive, saying his behavior was "unconscionable and egregious."
“Mr. Hodge, your conduct in this whole sordid affair is appalling and mind-boggling at the same time," Gorton said. "It is unbelievable that someone of your education, intelligence and involvement in philanthropy and successful professional activities could have been for so long and so intimately a party to the systematic, pervasive bribing of college officials to get their kids into school.”
The judge added: "There is no term in the English language to describe your conduct better than the Yiddish term 'chutzpah.'”
In addition to prison, followed by two years of court supervision, Gorton ordered Hodge pay a $750,000 fine and complete 500 hours of community service. The judge denied a request by Hodge's attorney to split the prison sentence, which he asked to serve at a facility near New York, where he has family.
Hodge, 60, of Laguna Beach, California, declined to comment as he left the Boston federal courthouse. He became the 14th parent sentenced in the sprawling scheme. Hodge led Pimco, which manages the world's largest bond fund, from 2014 to 2016. The firm is based in Newport Beach, California.
Prosecutors recommended a two-year prison sentence for Hodge, who engaged the scheme's mastermind, Singer, a college consultant, on five occasions over an 11-year span, making him one of the most prolific participants in the plot.
Hodge paid bribes to get two of his children into the University of Southern California and two others into Georgetown University as fake athletic recruits. None of the children played the sports competitively. He also was accused of unsuccessfully trying to get a fifth child into Loyola Marymount University through bribery.
“For over a decade, this defendant led a secret life. When no one was looking, this defendant stole four admissions spots from more deserving students," said Assistant U.S. Attorney Justin O’Connell. “Quite simply, there was no parent sentenced to date who benefited more from Singer’s scheme than Doug Hodge.
"By the end, Hodge had become so accustomed to the scheme that he developed a nickname for it. He called it 'Rick magic.'”
More:Lori Loughlin, other parents in college admissions scandal likely to go to trial in groups
Hodge told the court he has the "deepest regret for his actions" and knows he "illegally tipped the scale in favor of my children." He apologized to other children and parents who followed the rules and to his family for the "shame" he brought on them.
He said he was driven not by ego but his "own transformative educational experience and my deep parental love."
"I know my actions were inconsistent with the person that I tried to be in this world and the values that I hold close to my heart," he said.
Hodge pleaded guilty in October to conspiracy to commit mail and wire fraud, honest services mail and wire fraud, as well as conspiracy to commit money laundering. His legal team sought the "low end" of a zero- to six-month prison range.
Hodge's defense attorney, Brien O'Connor, told the judge that Hodge, a father of seven – including two children adopted from Morocco – lived a life of hard work, devotion to family and helping others. He argued his client's actions were an "aberration from a life otherwise dedicated to strong moral action and leadership."
He said Hodge was told by Singer the payments would support programs at universities.
“The honor should know that the man standing before you is good, through and through, and should not be defined by this one characteristic,” O'Connor said during the hearing, choking up multiple times as he talked about how Hodge helped thousands of underserved children through charitable work.
The judge, who told Hodge the “brazen, impudent gall and audacity" of his actions were "truly breathtaking," said he would have sentenced him to more than one year in prison but gave him a "discount" because of his extensive charity.
More:Former Pimco CEO to plead guilty for $500,000 bribes in college admissions scandal
Hodge's participation in Singer's scheme began in 2008, prosecutors found, when he paid former Georgetown tennis coach Gordon Ernst $150,000 to get his oldest daughter accepted as a recruit. He repeated the scheme in the same amount for one of his sons in 2011.
In 2013, Hodge paid $200,000 to Singer's for-profit company and nonprofit, The Key Worldwide Foundation, to get another daughter admitted into USC as a fake soccer recruit. Prosecutors said in 2015 he paid another $350,000 to Donna Heinel, a former senior administrator of women athletics at USC, to get another son admitted into USC as a fake football recruit.
Ernst and Heinel have both pleaded not guilty to federal charges.
Before Friday, the lengthiest prison sentence in the admissions case – also delivered by Gorton – was six months to Toby MacFarlane, a former real estate and title insurance executive from California. He admitted paying $450,000 to get his son and daughter admitted into USC as phony athletic recruits.
More:Judge calls USC dad a 'thief,' gives longest prison sentence so far in college admissions scandal
Gorton also is presiding over the case of actress Lori Loughlin and husband Mossimo Giannulli. Both are accused of paying $500,000 to get their two daughters accepted into USC as crew recruits. The couple has pleaded not guilty and is digging in for an October trial.
Actress Felicity Huffman, the other celebrity charged in the case, received a two-week sentence last year for paying Singer $15,000 to have her daughter's SAT exam score fixed. She was released in October three days early.
More:Felicity Huffman completes prison sentence, released early
Fifty-three people, including 36 parents and college coaches, are charged overall in the college admissions case. Parents are accused of making significant payments to Singer to either tag their children as athletic recruits to slip them into the school or to have someone fix scores on their college entrance exams.
Thirty-one defendants have pleaded guilty or agreed to plead guilty later; the remaining 22 are preparing for trial.
Hodge is the first of four parents to be sentenced over the next month after each pleaded guilty in deals with federal prosecutors. Others are: Michelle Janavs, a former executive of the company that makes Hot Pockets; Manuel Henriquez, founder and CEO of the venture capital firm Hercules Capital, and his wife, Elizabeth Henriquez.
Prosecutors called the four defendants "far and away the most culpable parents in the college admissions cases to have admitted their guilt to date."
"They also rank among the most culpable parents charged. They are repeat players, who engaged in the conspiracy again and again, over years."
Reach Joey Garrison and on Twitter @joeygarrison