How a Kentucky distillery owner allegedly bribed her son's way into a top university
LOUISVILLE, Ky. – The Palatellas seem to have it all.
They own three homes in two states, including a $3 million, 8,800-square-foot mansion south of San Francisco. They run a giant liquor distributorship in California and a new distillery on the Bourbon Trail in Bardstown, Kentucky.
But they had a problem: Their son didn't seem to have the grades or test scores to earn admission to a top university.
Like his father, Lou Palatella, a renowned offensive lineman and linebacker for the San Francisco 49ers in the 1950s, the son played football. But he had quit his high school team after realizing he was too small to play at the major collegiate level.
So what is a loving parent to do?
What Marci Palatella did, according to a 204-page federal indictment returned last week, was to pay $575,000 to buy her son’s way into the private and extremely selective University of Southern California.
Palatella, 63, was one of 33 affluent parents across the country, including Hollywood actresses and CEOs, charged in the nation’s largest college admissions scam. In all, 50 people were arrested and nine coaches implicated at schools such as Yale, Georgetown and USC.
Palatella's husband and son were not charged nor named in the indictment.
But the charging document says Palatella wired $75,000 to a bogus foundation to pay for a proctor to doctor her son's SAT college-entrance exam. With the proctor's help, Palatella’s son scored 1410 out of 1600 on the test.
According to the College Board, the average SAT score in 2018 was 1068.
March 14: 2 Stanford students file first class-action suit in largest-ever college admissions scandal
March 14: A Yale soccer coach caught in a sting: How the FBI broke open the sweeping college admission scandal
Then, the indictment alleges, Palatella mailed a $100,000 check to a senior associate athletic director at USC. That director presented a profile to the university's subcommittee for athletic admissions that falsely described Palatella's son as a defensive lineman and long snapper on his high school football team and as a member of several "local and statewide championship teams between 2015 and 2017."
Finally, after USC formally accepted her son, Palatella allegedly wired $400,000 to the foundation operated by the mastermind behind the scheme, William “Rick” Singer,” who the government says collected $25 million from parents over eight years to bribe coaches and administrators.
Scam mastermind cooperates with authorities
Unbeknownst to Palatella, Singer, who ran a college-prep company and the nonprofit Key Worldwide Foundation, had been charged last year and was secretly cooperating with investigators.
He pleaded guilty Tuesday in Boston to racketeering conspiracy, money laundering and obstruction of justice.
The USC administrator, Donna Heinel, also has been charged with racketeering, as has former USC assistant soccer coach Laura Janke, who the indictment states fabricated athletic profiles for Palatella's son and other students.
According to court papers, Palatella not only benefited by getting her son into USC, she also deducted her payments to the foundation as charitable donations on her tax returns.
March 14: College admissions scandal: Why we won't see mug shots for Lori Loughlin, Felicity Huffman
March 14: What we know about Olivia Jade, Lori Loughlin's daughter caught up in admissions scandal
Palatella did not respond to messages left at her distillery in Bardstown or at International Beverage, the Burlingame, California, company for which she is CEO. Her San Francisco attorney, Camilo Artiga-Purcell, also did not immediately respond to a call and an email.
Palatella made an initial court appearance Tuesday in U.S. District Court in San Francisco and was released on a $1 million unsecured bond, meaning she didn't have to post any money.
Couple praised for contributions to Bardstown
Bardstown Mayor Dick Heaton said Palatella and her husband have been "great corporate and community citizens" since they opened the distillery in 2016. They also bought a home in Bardstown, he said.
"We in Bardstown have had a great experience with Marci and Lou,” he said. “We feel blessed that they have chosen Bardstown.”
The couple have been coming to Kentucky for years for their liquor business and had joined the Kentucky Distillers' Association last year, said its president, Eric Gregory.
"We are not going to comment on this situation right now," he said.
The indictment says Palatella participated in both prongs of the scam – cheating on entrance exams and bribing college coaches and administrators to win favored admissions status for athletes.
In her case, that included an alleged bribe to Heinel, the senior associate athletic director whom USC has fired.
As with other parents, Palatella, at Singer's direction, first arranged for her son to be evaluated by a psychologist so he could qualify to get extended time to complete his SAT.
A contribution for admission
In September 2016, after receiving the psychologist's report, she asked Singer whether her son should apply for extended time on the ACT exam as well.
"Do both that way, if one says no we have the other,” he replied.
Singer arranged for the boy to take the exam at a testing center in West Hollywood, where the proctor could cheat for him, according to the indictment.
March 14: Surprising no one: What Lori Loughlin and Michael Jackson uproar teaches us about denial
March 13: The 'really smart guy' who aced SATs for rich students: 'I will always regret' the scandal
Palatella told her son's high school in Atherton, California, near San Francisco, that he was taking the test in Los Angeles because the family was taking him there for the weekend "to look at schools." She also said his outside college adviser recommended he take his test at that facility.
On March 7, 2017, she allegedly wired the $75,000 to one of the foundation's charitable accounts.
She also asked Singer, identified in court papers as CW-1 (cooperating witness 1), what else she could do to "position" her son for admission.
"Are you willing to make a contribution of several hundred thousand as a donation to get him in as a participant in someone's program?" he asked, according to a court-approved wiretap.
"Money, for the right environment, yes," Palatella allegedly said. "But he can never know."
Singer then gave her a price list, which he described as "the number it would take to get admitted, even with the fudging" of his SAT score.
It might take more than $1 million to bribe a student’s way into Georgetown or Boston College, he said.
Scammer says son's admission is 'covered'
In an email in October 2016, Palatella asked Singer whether certain schools would be "realistic" for her son, given his B average, the indictment states.
He answered that the only way in would be through athletics because colleges give leeway to athletes. And he said football was the best bet because that is the sport with the lowest grades.
When she asked whether her son should return to his high school team, he said not to bother: "I got it covered ... no worries on the story for your son."
Palatella responded with four heart emojis, according to the indictment.
March 13: Lori Loughlin released on $1 million bond in bribery scandal, can fly to Canada for work
March 13: 'Affirmative action for the rich:' How the privileged legally game the college admissions process
After she sent him a photo of her son in his football uniform, Singer forwarded it to Janke, who created a "football profile" for him that falsely described him as an active player on his high school team, according to the indictment.
Heinel then allegedly presented it to the admission committee in November 2017, falsely describing him as a "long snapper."
She later allegedly sent a conditional acceptance letter to the boy saying he had "potential to make a significant contribution to the intercollegiate athletic program as well as to the academic life of the university."
Palatella the next day sent a $100,000 check to Heinel, payable to the USC Women's Athletic Board, adding that "our son is beyond thrilled at the prospect of attending USC as a freshman this fall."
Six days after he got his formal acceptance letter the following spring, Palatella on April 1, 2018, allegedly wired $400,000 to the foundation.
Last October, at the direction of law enforcement, Singer called Palatella and told her that the IRS was auditing the foundation and that they needed to get their stories straight.
He said that if she were contacted, she should say her contributions were to "help underserved kids," and she agreed to do so, according to the indictment.
The scam was 'worth every cent'
No students have been charged, and the indictment says most of them didn’t know their parents had schemed to get them into college.
But Palatella in January allegedly told Singer that she had received a "disturbing call" from a neighbor whom she had told in confidence that she had paid $200,000 to secure her son's admission to USC. (In fact, the indictment notes, she had paid more than twice that amount.)
Palatella allegedly told Singer that she and her spouse "laugh every day" about how grateful they were for his services, and that "people at Goldman Sachs," the investment bank, had recommended him highly.
"It was worth every cent," she said, according to the indictment.
Contributing: Billy Kobin, (Louisville, Ky.) Courier Journal. Follow Andrew Wolfson on Twitter: @adwolfson
This article originally appeared on Louisville Courier Journal: How a Kentucky distillery owner allegedly bribed her son's way into a top university
