A Palo Alto couple linked to the college admissions cheating scandal were charged with money laundering on Tuesday—on top of their previous mail and wire fraud charges for allegedly scheming to cheat on their son’s SAT last year.
Amy and Gregory Colburn were previously accused of paying $25,000 for a proctor to secretly correct their son’s SAT in March 2018. They are just two of 33 parents named in an indictment stemming from “Operation Varsity Blues,” which uncovered a scheme that enabled parents to raise their children’s test scores or have their children recruited as athletes to secure a spot at a certain college. The scheme was primarily ran out of William Singer’s fake charity, Key Worldwide. Singer has pleaded guilty to four charges.
The Colburns allegedly took it one step further: They are accused of paying Key Worldwide more than $24,443.50 in stock in December 2017 and obtaining a letter from the bogus charity claiming the stock was a tax-deductible donation—which meant “no goods or services were exchanged.” Gregory Colburn then allegedly issued an additional $547.45 donation to Key Worldwide one day later, increasing his total payments to Singer to $24,990.95.
Four days after the Colburns’ son took the test in March at the West Hollywood Test Center, Singer paid $20,000 for Mark Riddell, a fake proctor, to review and correct his clients’ son’s answers. Singer told Riddell not to get too high a score for the Colburns’ son so that the cheating could be concealed from him.
Riddell ended up getting a 1190 out of a possible 1600 on the exam—which Colburns’ son then submitted to colleges like Texas Christian University, Indiana University, and the University of Arizona in early November.
In late October, Singer gave Amy and Gregory Colburn a call—informing them that the IRS had started to inquire about the Colburns’ payment to Key Worldwide in exchange for the cheating.
“OK. Is that a problem?” Amy Colburn allegedly asked. Singer replied that it wasn’t and said he told the agency that their “payment went to our foundation to help underserved kids.”
“And just in case they were to call you… we both know that Mark [Riddell] took the test for [your son]. But I just wanted to make sure that we don’t—we’re all on the same page,” Singer said.
“Right, it was to help underserved kids,” Gregory Colburn allegedly replied. “Got it. No problem.”
Singer started to cooperate with federal authorities before the parents were indicted, including recording phone calls with parents. Riddell, the fake proctor who corrected the Colburns’ son’s exam, also reportedly agreed to plead guilty for his role in Singer’s operation—which collected “25 million between 2011 and February 2019” from wealthy parents.
Patric Hooper, the lawyer for the Colburns, told The Wall Street Journal there was “something odd” about the October phone call between his clients and Singer. He said the Colburns were surprised by the call and were saying whatever needed in order to deflate the situation. Hooper maintained that Gregory and Amy Colburn hired Singer for “legitimate college counseling services” and believed Key Worldwide was an actual charity.
A source also told the newspaper that more parents already charged with mail and wire fraud charges could face money laundering charges—like the Colburns—as “early as next week.”