US appeals court overturns first 'Varsity Blues' scandal convictions

By Jonathan Stempel and Nate Raymond

BOSTON/NEW YORK (Reuters) -A U.S. appeals court on Wednesday threw out the fraud convictions of two wealthy fathers charged with involvement in a vast college admissions conspiracy to pay bribes so children could attend top universities.

In a 3-0 decision, the 1st U.S. Circuit Court of Appeals in Boston ruled in favor of private equity executive John Wilson and former casino executive Gamal Aziz, the first defendants tried in the probe known as "Operation Varsity Blues."

The probe exposed inequalities in higher education and resulted in more than 50 guilty pleas, including by actors Lori Loughlin and Felicity Huffman.

Parents were accused of conspiring with the scheme's mastermind, California admissions consultant William "Rick" Singer, to win college admission for their children through bribery, rigging entrance exams and fabricating athletic skills.

In a 154-page decision, the appeals court set aside all of Aziz's convictions, and all of Wilson's convictions except for filing a false tax return, which was upheld.

"Nothing in this opinion should be taken as approval of the defendants' conduct in seeking college admission for their children," Circuit Judge Sandra Lynch wrote. "We do not say the defendants' conduct is at all desirable."

The office of U.S. Attorney Rachael Rollins, which prosecuted the defendants, said it was reviewing the decision and assessing its next steps.

Noel Francisco, a lawyer for Wilson, said the decision overturned the "core" of the prosecution against his client, whose case was "fundamentally different" from others in the scandal.

Aziz's lawyer Joshua Sharp said his client "has maintained his absolute innocence from day one and is enormously grateful that the appeals court has reversed his unfair conviction."

Wilson and Aziz were convicted in October 2021 and sentenced four months later to a respective 15 months and 12 months in prison. They were allowed to remain free during their appeals, court records show.

'UNACCEPTABLE RISK' OF TAINTED CONVICTIONS

Prosecutors said Wilson, the founder of Hyannis Port Capital, paid $220,000 in 2014 to enable his son's admission to the University of Southern California (USC) as a water polo recruit.

Wilson was also accused of paying $1 million in 2018 to win spots for his twin daughters at Harvard University and Stanford University as sailing recruits.

Aziz, a former Wynn Resorts Ltd executive also known as Gamal Abdelaziz, was accused of paying $300,000 to secure his daughter's admission to USC as a basketball recruit.

In Wednesday's decision, Lynch said Wilson's and Aziz's mail and wire fraud convictions must be thrown out because the trial judge erred in instructing jurors that admissions slots constituted property.

She also said prosecutors failed to prove that the men agreed to join Singer's broader conspiracy - though they were aware he was helping other parents - despite introducing significant evidence about other parents' wrongdoing.

The "spillover" impact of this evidence created an "unacceptable risk" that Wilson and Aziz were convicted based on conduct other than their own, Lynch wrote.

Singer was sentenced in January to 3-1/2 years in prison, after becoming a government informant and pleading guilty to several charges.

Two other cases in the probe went to trial.

Former USC water polo coach Jovan Vavic was convicted of fraud and conspiracy in April 2022, but won a new trial after a prosecutor misstated the law during closing arguments. Another parent was found not guilty in a third trial.

(Reporting by Jonathan Stempel in New York and Nate Raymond in Boston; Editing by Marguerita Choy, Stephen Coates and Jamie Freed)