Stanford University

Stanford University (Photo credit: Lynn Watson)

Fallout From College Bribery Scandal Felt Around Bay Area

KCBS Radio Afternoon News
March 13, 2019 - 2:09 pm

SAN JOSE — The head of a Silicon Valley hedge fund announced that he's quitting after a federal investigation revealed his alleged role in the widespread use of bribes to get students into elite universities. 

Manuel Henriquez announced that he was leaving his position as CEO and chairman of Hercules Capital in Palo Alto following his indictment among 50 wealthy parents, celebrities college sports coaches and others in the alleged college admissions scam. Henriguez allegedly bribed a Georgetown tennis coach to designate one of his daughters as a recruit for the university's team to improve her odds of getting.

The fallout is being felt throughout the Bay Area where more than 10 parents were accused of paying hefty bribes 

Another prominent Bay Area figure snagged in the scandal was private equity investor Bill McGlashan. His San Francisco-based company TPG Capital put him on indefinite leave after revelations that McGlashan had been recorded saying he used Photoshop to create a bogus profile for his son in the hopes of getting him into USC or Stanford. 

The investigation, which also led to the firing of Stanford's sailing coach and the arrests of actresses Felicity Huffman and Lori Loughlin, angered many people who are daunted by the spiraling cost of college tuition. 

"People that are privileged and have money feel that they could just buy their way into anything," said one woman in San Jose to KCBS Radio.

Dubbed "Operation Varsity Blues," the investigation also netted Napa Valley winemaker Agustin Huneeus, Jr. He allegedly paid off athletic officials at USC to get his daughter into the university. 

In Woodside, Bruce Isackson, the president of real-estate firm WP Investments paid $500,000 to get his daughter into UCLA and USC, authorities said. 

A nonprofit called Key Worldwide Foundation was at the center of the scheme, helping to arrange the payments, according to federal authorities. 

Reporting by Jennifer Hodges and Jeffrey Schaub.