B-School Dean Found Guilty Of MBA Rankings Fraud

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Fox School of Business Dean Moshe Porat was found guilty of conspiracy and wire fraud for cheating on business school rankings

After seven days of testimony, it took a Philadelphia jury less than one hour to find former Fox School of Business Dean Moshe Porat guilty of conspiracy to commit wire fraud, according to reporting in the Philadelphia Inquirer.

The jury of eight women and four men returned to the courtroom today (November 29) for closing arguments after a long Thanksgiving break. Their guilty verdict — causing Porat to shake his head quietly in the courtroom — followed soon after closing arguments were finished.

“He was on top of the world, hailed as a visionary leader, a master fund-raiser,” Assistant U.S. Attorney Mark Dubnoff told the jury during the prosecution’s argument Monday. “But the image that the defendant created for himself and the Fox School of Business was based on fraud.”

‘AN UNHAPPY MOMENT FOR OUR STUDENTS AND ALUMNI’

The jury agreed. They bought into the prosecution’s contention that Porat was the ringleader in an effort to deceive U.S. News & World Report by, among other things, falsely claiming that 100% of its incoming online MBA students had submitted GMAT or GRE scores despite knowing that far fewer had actually done so. The scheme led to four consecutive No. 1 rankings for Fox’s online MBA program. Other data discrepancies in Fox’s part-time MBA program helped that program shoot up in U.S. News’ PMBA rankings. Enrollments soared in both programs, and the scheme raked in $40 million in extra tuition, according to testimony in the trial.

Yet the fraud was even far more extensive than the details presented to the jury by the prosecution. The university’s own investigation found that there was similar misreporting for multiple years in other programs, namely the Executive MBA, Global MBA, Master of Science in Human Resource Management and Master of Science in Digital Innovation in Marketing. These programs all had issues related to the reporting of one or more metrics, including the number of new entrants providing GRE/GMAT scores, student indebtedness and applicants’ undergraduate GPAs. For the Online Bachelor of Business Administration, Temple’s review found misreporting related to student indebtedness. Inaccurate data was not only submitted to U.S. News but also the Princeton Review, the Financial Times, The Economist and Business Week.

“The hope is that this case sends a message to other college and university administrators that there are real consequences to making representations that students and applicants rely on,” Assistant U.S. Attorney Mark B. Dubnoff said. “So many people turn to these rankings … to help them make informed decisions of where to go to college, graduate school, and it’s important that people are honest and fully truthful with the representations they make.”

Porat faces up to 25 years in prison and $500,000 fine. He will be sentenced in March, the Inquirer reported (see Commentary: Arrogance Is What Ultimately Caused This B-School Dean’s Downfall).

“We respect the justice system and the jury’s decision in this matter,” a spokesperson for Temple University said in a statement. “This is an unhappy moment for our students and alumni, but our focus remains on delivering the best possible outcomes for our students.”

WHY PORAT DIDN’T TESTIFY

The case began with jury selection on November 9, with testimony, opening statements and closing arguments lasting seven full days. U.S. attorneys took up five of those days to make its case, calling more than 10 witnesses to the stand, including seven current and former Temple officials. Porat’s defense called 10 character witnesses, a mix of personal friends, Fox colleagues and students, and local business people, over the course of one day. Both sides rested their cases on November 22 before the holiday.

Porat never took the stand at the trial, but jurors did get to hear from him. Assistant U.S. Attorney Mark Dubnoff played a series of clips from video depositions taken over five days in the summer of 2020. The depositions were part of Porat’s $25 million defamation lawsuit against Temple University after his firing. In the clips, Porat was often combative and grew more agitated with interviewers as their questions became more pointed.

Whether or not to testify is a decision that rests solely on defendants, but is typically made with advice of their counsel. Defense co-counsel Michael Schwartz declined to answer Poets&Quants’ questions about why Porat did not testify in this trial. But, judging by Porat’s video interviews, putting him on the stand could have been risky for a few reasons.

Former Fox Dean Moshe Porat

First, while defendants have the Fifth Amendment right against self-incrimination, they waive that right if they voluntarily take the stand. That means Porat would have been compelled to answer prosecutors’ questions under cross-examination. U.S. attorneys had already used the video clips to show direct contradictions to other witnesses’ versions of events as well as inconsistencies in Porat’s own versions. For example, Porat’s recollection of the timing of the infamous champagne toast to celebrate the No. 1 ranking changed over the course of several video clips as interviewers confronted him with conflicting emails. Further, Porat’s claims that he immediately directed staff to correct the false GMAT numbers with U.S. News was directly challenged by four Fox officials the state called as witnesses.

The defense risked Porat becoming agitated on the stand (as he had in the video clips) in front of the very jurors who would be deciding his fate.

‘THIS IS A CASE ABOUT CHEATING’

The trial began November 9 in the Eastern District of Pennsylvania’s federal courthouse in Philadelphia. Prosecution painted the ex-dean as an intimidating, micromanaging boss obsessed with rankings.

Porat was “singularly focused, relentlessly focused” on increasing the business school’s standing in national rankings, assistant U.S. attorney Nancy Potts said in the opening arguments. That singular view permeated throughout the business school’s culture, and Porat tightly controlled the small circle of people charged with submitting rankings data to ranking entities.

“This is a case about cheating … for money, power and prestige,” Potts told the jury.

Seven of Porat’s former colleagues at Fox portrayed him as an intimidating dean who made staffers tremble, and who urged a colleague to “keep a lid on it” once the scandal came to light. Other witnesses included former Fox students, former Temple Provost JoAnne Epps, and FBI Agent Brian Coughlin, who led the investigation. Poets&Quants founder and editor John A. Byrne was the state’s first witness, testifying as an expert in rankings and business education. (Byrne’s January 2018 story about Fox’s fourth No. 1 ranking brought the scandal to the attention of Temple officials.)

Prosecutors did not call to the stand former Fox staffer Marjorie O’Neill, named repeatedly throughout the trial on both the direct and cross-examinations of several state witnesses. She pleaded guilty to conspiracy charges in the case this summer, but has said that she submitted the false numbers at Porat’s directive. Prosecutors likely wanted to avoid the defense’s tough cross examination of a witness that admitted to breaking the law and was cooperating with the state.

A MAN OF ‘ABSOLUTE INTEGRITY’

Fox School of Business at Temple University.

However, the defense contended that while Porat was perhaps a demanding boss who cared deeply about Fox’s standing, he was a leader who elevated Fox into a nationally-recognized business school over the course of a distinguished 40-year career. They content that it was O’Neill who submitted inaccurate data to the rankings magazine, not Porat. Temple University itself fostered the culture of pursuing higher rankings at all costs and did not follow its own checks and balances to prevent the kind of abuse that O’Neill was engaged in.

The question for jurors, defense co-counsel Richard Zack said in his opening statement, is not whether Porat deserved to be fired or if he should have done a better job in preventing O’Neill from submitting inaccurate information: “The question is whether he committed fraud. The evidence will show that he did not.”

“It’s not a crime to be a difficult boss … or even to want high rankings,” Zack said.

The 10 friends, students and colleagues called as defense witnesses described Porat as an “inspiration,” a man of “absolute integrity” who loved Temple and the Fox School of Business.

“I called all the other deans paperweights. They sat in the chair and did nothing. Just administration. Moshe was a visionary, a forward thinker,” testified retired Fox professor Arvind Phatak. “He would ask people like me, ‘What can I do for the business school to get it the image it deserves?’”

Today’s verdict showed which version of Moshe Porat jurors found more believable.

More About The Temple Rankings Scandal

How It Happened: Anatomy Of A Business School Rankings Fraud

Jones Day Investigation: Temple Dean Sacked Over Ranking Scandal

The Indictment: Former B-School Dean Indicted On Fraud Charges In MBA Rankings Scandal

MBA Rankings: Why Business Schools Are Willing To Cheat

Trial Coverage: Trial Begins For Ousted Temple Dean In Rankings Fraud Case

Day 1: ‘I Paid For Fine Dining, But I Got McDonald’s’: MBA Student Testifies In Rankings Fraud Trial

Day 1: ‘An Intimidating Man’ Who Made Staffers ‘Tremble’: Temple Vice Dean Testifies In Rankings Fraud Trial

Day 2: Ousted Dean: ‘Innocent Mistake’ Caused B-School To Be Thrown Out Of Ranking

Day 3: ‘Undergraduate Ethics Class’ Made Temple Fox Staffer Push For Correcting Inaccurate Data Reported To U.S. News

Day 4: Trying To Head Off An Independent Probe, Temple Fox Dean Tells Provost ‘If You’re In A Hole, Don’t Dig’

Day 5: Rankings Fraud Trial: Fox Dean Promoted Book In Wake Of Unranking

Day 6: Ousted Fox Dean Wanted App That Would Make His Messages ‘Disappear’

Day 7: Prosecution And Defense Rest In MBA Rankings Fraud Case

The post B-School Dean Found Guilty Of MBA Rankings Fraud appeared first on Poets&Quants.

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