Napa Valley vintner Agustin Huneeus Jr. charged in college admissions scandal

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Two North Bay residents are among 50 people indicted in a sweeping college admissions scandal revealed Tuesday by Boston federal prosecutors, who say wealthy parents facilitated fraud and conspiracy on behalf of their children and collectively spent $25 million to bribe university personnel to designate them athletic recruits even in cases when the students did not play the sport involved.

Agustin Huneeus Jr., president of Napa Valley’s Huneeus Vintners, and Marci Palatella, who has Healdsburg ties and is CEO of a Burlingame-based liquor distribution company, are among 33 parents charged in the case.

Both got their kids into the University of Southern California through remarkably similar paths, according to the indictment.

They paid a high price, too, if the indictment holds firm, though Palatella, whose husband is former San Francisco 49er Lou Palatella, paid a significantly higher one, at more than $500,000. He is not charged in the case.

Huneeus and Palatella now face federal charges for alleged mail and wire fraud as a result.

There is no word yet about the status of their children, though authorities said the beneficiaries of the alleged deceit often were unaware of the intrigue playing out around them.

Neither Huneeus nor Palatella Tuesday could be reached for comment.

Prosecutors say the parents involved in the case plotted to get their kids into some of the nation’s elite colleges, in part by using a college entrance exam cheating scheme through which they obtained test-taking time extensions by falsifying learning disabilities. They also arranged to have their students take the exams at one of two testing locations in Houston, Texas, or West Hollywood, where a stand-in could take the exam, provide the answers or correct the students’ answers.

At the center of the scandal is William Rick Singer, of Newport Beach, owner of The Edge College & Career Network, also known as The Key, and CEO of the Key Worldwide Foundation, its nonprofit arm and what the prosecutors called a “purported charity.”

Singer, an admissions counselor who directed parents about positioning their students for college applications, directed certain clients to make payments to the foundation that they then wrote off on their taxes, in effect disguising bribes made to college administrators and coaches, prosecutors say.

Singer pleaded guilty to racketeering conspiracy, money-laundering conspiracy, conspiracy to defraud the federal government and obstruction of justice and has been cooperating with law enforcement.

Huneeus, 53, of San Francisco, oversees the winery operation started by his father, Agustin, who came from his native Chile in the 1970s to make his mark in the U.S. wine industry.

In 2009, the company formed a partnership with Flowers Vineyards and Winery in Healdsburg, known for its top flight pinot noir. It now owns the winery and is supposed to open the Flowers Vineyard & Winery tasting room on Westside Road this summer at the old VML Winery space. It also has in its portfolio the Quintessa estate in Rutherford and the Faust label for cabernet sauvignon and Illumination for sauvignon blanc.

He appeared before Chief Magistrate Judge Joseph Spero in San Francisco on Tuesday and was released on a $1 million unsecured bond and surrendered his passport. His next court appearance will be on March 29 at the federal courthouse in Boston.

Federal prosecutors alleged Huneeus participated in the cheating scheme in 2017 and 2018 to benefit his daughter. Huneeus allegedly conspired to bribe Donna Heinel, senior associate athletic director at the University of Southern California, and Jovan Vavic, the water polo coach at USC, to help his daughter gain admission at the Los Angeles university as a water polo recruit, according to the indictment.

Huneeus paid $50,000 to Key Worldwide Foundation.

In exchange for the contribution, conspirators assisted Huneeus’ daughter when she took her SAT at a West Hollywood test center in March 2018, according to the indictment. The conspirators are believed to be Singer and Mark Riddell, director of college entrance exam preparation at IMG Academy in Bradenton, Florida, based on supporting material in the indictment.

Singer told Huneeus that he controlled the test center and that Riddell would correct his daughter’s mistakes after she completed the test, prosecutors alleged. Singer arranged for a psychologist to write to the College Board — which administers the SAT — that the daughter would need extended time to take the exam. The request was granted, according to prosecutors.

Riddell flew out to Los Angeles to proctor the exam for Huneeus’ daughter on March 10, 2018. Riddell told investigators that he assisted Huneeus’ daughter with questions on the test and corrected her answers after she finished.

On April 3, Huneeus wired $50,000 to the foundation, the indictment states.

His daughter scored 1380 out of a possible 1600 on the exam, which placed her in the 96th percentile nationally. But Huneeus complained to Singer about his daughter’s score in an Aug. 30 phone call that was monitored by a court-authorized wiretap and wondered why it wasn’t a higher mark, such as 1550.

Singer told Huneeus that he could not get a higher score for the daughter because the exam would be investigated based on her grades, prosecutors alleged.

Singer then explained the scheme, noting he would take the transcript and SAT score of Huneeus’ daughter to Heinel to help her get admission under the guise of being a USC athletic recruit, according to court documents. Singer worked on a fraudulent water polo profile for the daughter to go along with the submission. For example, Singer could not locate a suitable photo of Huneeus’ daughter playing water polo, so he used someone else.

On the call, Huneeus acknowledged that his daughter was not qualified to be a water polo recruit and expressed concern about “this thing blow(ing) up in my face.” Singer replied: “hasn’t in 24 years.”

Huneeus’ daughter received a conditional acceptance from USC on Nov. 7, 2018. Twelve days later, Huneeus sent a $50,000 check made payable to USC Women’s Athletics Board in care of Heinel, prosecutors alleged.

A spokesman for Marin Academy, a San Rafael private high school, confirmed Tuesday night that Huneeus is an academy parent.

In an early email inquiry about how best to “position” her son for college admission, Palatella, 63, suggested money was no obstacle “for the right environment” for her son, though “he can never know,” she wrote, according to the indictment.

Palatella, head of International Beverage and proprietor of Preservation Distillery in Bardstown, Kentucky, paid $475,000 to Singer’s “nonprofit foundation” and sent $100,000 to the USC Women’s Athletic Board upon learning that her son had been accepted as an athletic recruit even though he had taken a year off from playing high school football and, she acknowledged, wasn’t big enough to play in college, the indictment said.

But that did not stop her from submitting a photo of her son in a football uniform from a previous season for use with a player profile assembled by former USC assistant women’s soccer Coach Laura Janke, who also was charged Tuesday. That profile, among other things, described Palatella’s son as an “active player” on his high school’s defensive line and a “long snapper,” as well as a member of several local and statewide championship teams between 2015 and 2017, the indictment said.

Palatella has had a home in Hillsborough, as well as Healdsburg. Her son appears on the 2015 and 2017 team rosters for Sacred Heart Preparatory School in Atherton.

Even before smoothing her son’s path to college based on his athleticism, Palatella had made sure his college admissions test scores would be up to snuff, making arrangements for a time extension on his admission exams and ensuring he took the test in West Hollywood, like Huneeus did, prosecutors said.

Her son scored 1410 out of a possible 1600, and a day later, she sought clarification via email about what the indictment calls the “price list,” asking about “the number it would take to get admitted even with the fudging of the scores,” the indictment states.

She learned it would take a “large but not significant” donation to secure a 75 percent chance of admission to USC, though something like Georgetown a might take more than $1 million.

Once his application and football profile had been submitted, Patella’s son was offered a conditional acceptance as a football recruit in November 2017 by USC’s senior associate athletic director Donna Heinel, who is charged in the indictment.

His formal acceptance arrived the following March, followed six days later by a $400,000 invoice for the Key Word Foundation.

Months later, Singer called Palatella to let her know he was being audited by the IRS and wanted to make sure that she felt comfortable about the donations she had made to help underserved kids through his foundation, according to the indictment.

He also wanted to “make sure that our stories are the same,” he said.

Huneeus had a similar exchange with Singer.

On Nov. 29, Singer told him his foundation was being audited by the IRS and asked him to tell federal agents the $50,000 donation was for underserved kids and not for the assistance with his daughter, the indictment states. The call was recorded.

At first, Huneeus was taken aback. “Dude, dude, what do you think, I’m a moron?”

Singer replied no.

“I’m going to say that I’ve been inspired how you’re helping underprivileged kids get into college. Totally got it,” Huneeus said according to prosecutors.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell. You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.

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