By Melissa Korn and Jennifer Levitz
A family from China paid a college counselor $6.5 million for
help securing a spot at Stanford University, according to a person
familiar with the matter, and connected to the counselor via a
Morgan Stanley financial adviser, according to that person and
another individual with knowledge of the situation.
Morgan Stanley has since fired the Pasadena, Calif.,-based
adviser, whom it identified as Michael Wu.
The involvement of Morgan Stanley illustrates how William "Rick"
Singer, the Newport Beach, Calif., college consultant who has
admitted to masterminding the college-admissions cheating scheme,
infiltrated wealthy networks to pitch his services.
Morgan Stanley said it fired Mr. Wu for not cooperating with an
internal investigation into the college-admissions matter. The
company said it is cooperating with authorities. The scope of the
firm's internal investigation couldn't be learned.
In a statement late Wednesday, Mr. Wu's lawyer indicated that
his client had been misled by Mr. Singer about the purpose of the
payment and said Mr. Wu was fired by Morgan Stanley while out of
the country and attempting to cooperate with the internal
investigation.
"Mr. Wu was introduced to Rick Singer through Morgan Stanley as
a trusted source," said lawyer Raymond Aghaian.
The $6.5 million payment to the college counselor has been of
particular interest since it was the highest payment cited by the
U.S. Attorney's Office in Massachusetts when prosecutors announced
the admissions-fraud case in March. The family who made the payment
hasn't been charged in the case.
Chinese families were among Mr. Singer's alleged top clients.
Another Chinese family paid him $1.2 million for help getting a
young woman into Yale University, connecting with Mr. Singer
through an employee at Oppenheimer & Co.'s Summa Group.
Prominent financial firms helped give Mr. Singer credibility by
bringing him in to speak at employee and client events, or
referring him to existing or potential clients. Affluent families
rely on the firms for guidance not only on managing wealth, but
also on related issues like college planning and philanthropy.
Morgan Stanley's website previously listed Mr. Wu as being a
managing director and international client adviser.
Mr. Aghaian said Mr. Singer falsely told Mr. Wu the payment
would go to Stanford -- for salaries, special athletic programs,
scholarships for the needy and more. "Singer made such statements
as he knew Mr. Wu would not engage in wrongdoing," the lawyer said.
"Singer also stated that admission to the university was not
guaranteed."
Mr. Singer's lawyer didn't immediately reply to a request for
comment.
Morgan Stanley has said it at one time included Mr. Singer's
college-counseling business on its list of referral organizations.
A person familiar with the referral arrangement said referrals
could be passed to clients, and that Mr. Singer's company was off
the list after 2015. Mr. Singer could have maintained contact with
some Morgan Stanley employees after he was no longer an official
referral, the person said.
The Wall Street Journal couldn't immediately determine the
relationship between Morgan Stanley and the family that allegedly
paid the $6.5 million to Mr. Singer.
In the matter of the young woman admitted to Yale, Oppenheimer
said an employee met her father socially and served as a
translator, an activity outside her Oppenheimer job. During that
activity, the firm said, the father sought a recommendation for a
college counselor. Oppenheimer said the employee introduced the
family to Mr. Singer. The firm said the family has never been a
client of the firm. Mr. Singer was a board member of Summa's
philanthropic foundation as recently as January, according to the
charity's website.
Prosecutors have said their investigation into college
admissions-fraud continues. They traveled to Los Angeles in April,
according to a court filing. Assistant U.S. Attorney Eric Rosen
said the government's evidence included emails referencing some
parents who haven't been named, including "some who plotted with
Singer and withdrew for a variety of reasons."
The young woman admitted to Stanford got in after her family
paid Mr. Singer $6.5 million in 2017, according to the person
familiar with the matter.
Mr. Rosen said in court in March that Mr. Singer brought an
applicant to then-Stanford sailing coach and created a falsified
sailing athletic profile for the prospective student.
"This candidate was ultimately accepted to Stanford partly due
to the fact that she had fabricated sailing credentials," Mr. Rosen
said.
After she was admitted, Mr. Rosen said, Mr. Singer paid the
then-sailing coach $500,000 from his Key Worldwide Foundation
charity, which was sent to the Stanford Sailing Program. A Stanford
spokesman said the payment came months after the student was
admitted, and the school received a total of $770,000 from the
charity.
Stanford said last month that it had rescinded the admission of
one student this spring after determining some material on that
student's application was false. The student hadn't received
recommendations from any athletic coaches and wasn't affiliated
with the sailing team. It didn't name the individual. A Stanford
spokesman declined to identify the student, citing federal privacy
laws, or comment further on the case.
The school said it came across the student after conducting a
review of people potentially tied to Mr. Singer's scheme.
Stanford's former sailing coach, John Vandemoer, has pleaded guilty
to racketeering conspiracy and admitted to taking bribes in
exchange for giving athletic recommendations to two other
applicants. Neither of those applicants attended the school. Mr.
Vandemoer has been fired from Stanford.
Write to Melissa Korn at melissa.korn@wsj.com and Jennifer
Levitz at jennifer.levitz@wsj.com
(END) Dow Jones Newswires
May 02, 2019 07:04 ET (11:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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