Earlier this year, the FBI uncovered a massive, nationwide college entrance admission scandal, where wealthy parents paid a man named William “Rick” Singer to get their children into top-ranked universities, such as Georgetown, Stanford, UCLA, and Yale.
The Scandal made headlines across the country, both due to the audacity of the crimes and the high-profile names associated with them. A few celebrities were revealed to have used Singer’s services, including Lori Loughlin and her husband, fashion designer Mossimo Giannulli, allegedly paid Singer a bribe of $500,000 to ensure their daughters were accepted to the University of Southern California.
Singer’s service included faking admissions scores, bribing coaches, and passing students off as athletes. To cover up these illicit activities, payments to Singer were disguised as charitable contributions to the nonprofit Key Worldwide Foundation (KWF). While KWF was registered with the IRS as a legitimate nonprofit, it’s clear now that all donations and grants through the organization were part of this scheme. Adding insult to injury, many parents who used Singer’s services deducted their “donations” to KWF from their federal income taxes, committing tax fraud.
Besides cheating to get their daughters into USC, Loughlin and Giannulli opted to follow in the footsteps of other wealthy parents and deduct the bribe as a charitable contribution. Now, in addition to facing 40-year old prison sentences for their alleged involvement in the admissions scandal, the couple is also being audited by the IRS. Reports claim that they will be audited for five years on their personal income taxes and that Giannulli’s business will be audited for three years.
Loughlin and Giannulli pleaded not guilty to charges of fraud and money laundering after rejecting a plea deal. It’s up to the court and a jury to decide their fate with those charges, but even if they are found innocent, it won’t get them off the hook with the IRS. When it comes to tax fraud, the IRS always wants the money that’s due, and they have no problem sending people to jail for cheating on their taxes. Aunt Becky might go from a Full House to the Big House.
The Roz Report September/October 2019