News

Former venture capital CEO sentenced in college admissions scam

Judge orders Manuel Henriquez to serve six months in prison

Former Hercules Capital CEO Manuel Henriquez, 56, of Atherton, was sentenced July 29 for conspiring in the national college admissions scandal. Courtesy Hercules Capital.

Manuel Henriquez, the former CEO of a Palo Alto-based venture capital firm, was sentenced Wednesday to six months in prison for paying more than $500,000 in a national admissions scam that involved more than 50 parents, sports staff and test proctors, federal prosecutors said. He helped his daughters get admitted to college by ensuring they did well on college entrance exams five times.

Henriquez, 56, of Atherton pleaded guilty last year to a charge of conspiracy to commit mail and wire fraud and honest services mail and wire fraud, plus an additional charge of conspiracy to commit money laundering, according to the U.S. Attorney's Office. He founded Hercules Capital and stepped down as CEO when federal indictments in the college admissions scandal were announced in March 2019.

The indictments claimed the parents paid large sums of money to education consultant Rick Singer, who used the funds to bribe universities into guaranteeing their children admission, mostly as athletic recruits despite the applicants having little to no experience in the sport. The funds were disguised as donations to Singer's fake nonprofit organization, The Key Worldwide Foundation. Oftentimes, parents worked with Singer to have test proctors correct their student's answers on the SAT or ACT college entrance exams.

In June 2015, Henriquez paid Singer to have a third party correct his older daughter's answers on SAT II subject tests and four months later on a SAT exam, according to the U.S. Attorney's Office.

Henriquez continued seeking Singer's services for his youngest daughter three times between 2016 and 2017 by paying for a third party to correct tests she took in Los Angeles and Houston, prosecutors said.

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The Atherton resident also paid $400,000 to help his daughter become a tennis recruit at Georgetown University despite her having no competitive experience in the sport, the U.S. Attorney's Office said.

In a July 21 letter to U.S. District Court Judge Nathaniel Gorton, Henriquez expressed "regrets, shame, sorrow and remorse" for his actions. "I never imagined being called a 'common thief,' but here I stand before you, humiliated and destroyed.

"I fully realize and acknowledge that what I have done was wrong, illegal, unfair and hurtful, especially to the many honest college applicant students and parents," Henriquez wote. "I am ashamed of my actions of putting myself and family over all the children and parents who played by the rules."

In admitting to his wrongdoings, Henriquez also said losing control over his company was "like losing my third child, and I lost that along with my professional reputation and integrity."

In addition to the prison sentence, Gorton ordered Henriquez to perform 200 hours of community service while under two years of supervised release and to pay a $200,000 fine.

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Prosecutors had requested Henriquez be sentenced to five months in prison (a reduction from an earlier petition of 18 months); two years of supervised release; 250 hours of community service; and a $150,000 fine.

In a July 22 sentencing memorandum, prosecutors stated that Henriquez and his wife, Elizabeth Henriquez, conspired with Singer to cheat on the exams five times, the most instances compared to other parents involved in the scam.

On Jan. 27, 2019, less than two months before they were indicted, in cooperation with the federal investigation, Singer visited the couple's home, where Manuel Henriquez verified that Singer helped them cheat on the tests and worked to cover up the fraud.

Elizabeth Henriquez was sentenced on March 31 to seven months in prison, two years of supervised release, 300 hours of community service and a $200,000 fine.

Manuel Henriquez is the 28th parent who pleaded guilty and the 20th parent sentenced in the scandal, according to prosecutors.

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Former venture capital CEO sentenced in college admissions scam

Judge orders Manuel Henriquez to serve six months in prison

by / Palo Alto Weekly

Uploaded: Wed, Jul 29, 2020, 3:25 pm

Manuel Henriquez, the former CEO of a Palo Alto-based venture capital firm, was sentenced Wednesday to six months in prison for paying more than $500,000 in a national admissions scam that involved more than 50 parents, sports staff and test proctors, federal prosecutors said. He helped his daughters get admitted to college by ensuring they did well on college entrance exams five times.

Henriquez, 56, of Atherton pleaded guilty last year to a charge of conspiracy to commit mail and wire fraud and honest services mail and wire fraud, plus an additional charge of conspiracy to commit money laundering, according to the U.S. Attorney's Office. He founded Hercules Capital and stepped down as CEO when federal indictments in the college admissions scandal were announced in March 2019.

The indictments claimed the parents paid large sums of money to education consultant Rick Singer, who used the funds to bribe universities into guaranteeing their children admission, mostly as athletic recruits despite the applicants having little to no experience in the sport. The funds were disguised as donations to Singer's fake nonprofit organization, The Key Worldwide Foundation. Oftentimes, parents worked with Singer to have test proctors correct their student's answers on the SAT or ACT college entrance exams.

In June 2015, Henriquez paid Singer to have a third party correct his older daughter's answers on SAT II subject tests and four months later on a SAT exam, according to the U.S. Attorney's Office.

Henriquez continued seeking Singer's services for his youngest daughter three times between 2016 and 2017 by paying for a third party to correct tests she took in Los Angeles and Houston, prosecutors said.

The Atherton resident also paid $400,000 to help his daughter become a tennis recruit at Georgetown University despite her having no competitive experience in the sport, the U.S. Attorney's Office said.

In a July 21 letter to U.S. District Court Judge Nathaniel Gorton, Henriquez expressed "regrets, shame, sorrow and remorse" for his actions. "I never imagined being called a 'common thief,' but here I stand before you, humiliated and destroyed.

"I fully realize and acknowledge that what I have done was wrong, illegal, unfair and hurtful, especially to the many honest college applicant students and parents," Henriquez wote. "I am ashamed of my actions of putting myself and family over all the children and parents who played by the rules."

In admitting to his wrongdoings, Henriquez also said losing control over his company was "like losing my third child, and I lost that along with my professional reputation and integrity."

In addition to the prison sentence, Gorton ordered Henriquez to perform 200 hours of community service while under two years of supervised release and to pay a $200,000 fine.

Prosecutors had requested Henriquez be sentenced to five months in prison (a reduction from an earlier petition of 18 months); two years of supervised release; 250 hours of community service; and a $150,000 fine.

In a July 22 sentencing memorandum, prosecutors stated that Henriquez and his wife, Elizabeth Henriquez, conspired with Singer to cheat on the exams five times, the most instances compared to other parents involved in the scam.

On Jan. 27, 2019, less than two months before they were indicted, in cooperation with the federal investigation, Singer visited the couple's home, where Manuel Henriquez verified that Singer helped them cheat on the tests and worked to cover up the fraud.

Elizabeth Henriquez was sentenced on March 31 to seven months in prison, two years of supervised release, 300 hours of community service and a $200,000 fine.

Manuel Henriquez is the 28th parent who pleaded guilty and the 20th parent sentenced in the scandal, according to prosecutors.

Comments

collateral damage
Another Palo Alto neighborhood
on Jul 29, 2020 at 4:49 pm
collateral damage, Another Palo Alto neighborhood
on Jul 29, 2020 at 4:49 pm
35 people like this

It wasn't just that they took a spot from a family who played by the rules, worse, the publicity around the cheating has made the college entrance testing accommodations process a NIGHTMARE for many students with legitimate learning disabilities who need accommodations, especially those already failed by school districts. Do you know what it's like for a kid whose dyslexia was only caught late to get accommodations after this story broke, especially with reporters casting aspersion on anyone who had to pay for their own child to get testing?

This guy seems to confuse natural consequences of his actions with contrition. He and the others should have been required to pay into a fund for restitution to families whose kids were harmed by these actions and how the various institutions responded to make things even harder for those who play by the rules. I wish the courts would think about fines more in terms of setting up a fund with an ombudsposition to assess those who have show damages and dole out scholarships, similar to disaster ombudspositions. Or a fund to provide testing for all students regardless of income, so that everyone who needs accommodations receives them.


Family Friendly
Old Palo Alto
on Jul 29, 2020 at 5:15 pm
Family Friendly, Old Palo Alto
on Jul 29, 2020 at 5:15 pm
26 people like this

Just the tip of the iceberg, really. University admissions have become a spoils and patronage system in this country.

Other major countries, like Korean, Japan, and France, have almost purely meritocratic systems, but the US is rapidly removing merit from the equation entirely. The University of California has even suspended use of the SAT.


Paly Mom
Palo Alto High School
on Jul 29, 2020 at 5:40 pm
Paly Mom, Palo Alto High School
on Jul 29, 2020 at 5:40 pm
32 people like this

College admission cheating has been ongoing since the beginning of time, duh. The wealthy and connected help each other. U.S. News & World Reports' college rankings? 15% of the ranking is based upon endowments. The rankings can be manipulated and it has nothing to do with the quality of the education. Northeastern has been manipulating over the years so their ranking has improved. The elite universities are for the super wealthy and connected; everyone else has to be outstanding to gain entry onto their campuses. Anyone who thinks this world is a meritocracy is naive. I've lived decades in Palo Alto and am completely unimpressed with the Ivy League graduates, especially for such things as City Council and School Board where they have to make common sense decisions. Elite degrees don't result in success in life if the person doesn't have life skills and common sense.

No big deal for Manuel Henriquez, he is loaded financially anyway. He has no true remorse, they just say that for lighter sentences. Embarrassment is his only punishment. What about his daughters' college degrees? Will they be kicked-out of the colleges or degrees rescinded?

The laws should be changed to allow hefty fines depending on their net worth, like $2 million plus so it at least hits them in the pocketbook. Although, lawmakers are crooks who won't do that. Felicity Huffman went to Dublin, CA where they are allowed sunbathing. Her stay was probably similar to lockdown at home like we are all doing.


Rebecca Eisenberg
Old Palo Alto
on Aug 1, 2020 at 2:07 am
Rebecca Eisenberg, Old Palo Alto
on Aug 1, 2020 at 2:07 am
4 people like this

I agree with both of the comments above. Additionally, I can say as a lawyer who worked in-house for companies who did business with this man's venture firm, that to me, from the other side of the table (and obviously without exposing any client confidential info), there were significant ethical gaps with the way that his company was run. I have not had any recent interactions with his firm, thankfully, but I think that the firms that still do business with his firm either may not be fully informed, or may be involved. (My employers were in the former category, and it did not always end well.)

More to the point, having spent the time to research the individuals indicted from Silicon Valley, I have a feeling that more indictments and/or plea bargains may be in the works. After all, the best way to obtain a short sentence is to offer up the maximum number of co-conspirators and the most valuable pointers to future indictments.

It's definitely a cautionary tale for those who seek Silicon Valley short-cuts -- a lesson made even more true in the context of the coronavirus pandemic: there are some things that money cannot buy.

For most of us, that is a good thing.


Collegekiddaddy
Registered user
Barron Park
on Aug 5, 2020 at 10:50 pm
Collegekiddaddy, Barron Park
Registered user
on Aug 5, 2020 at 10:50 pm
8 people like this

My kid was accepted at every UC, some Ivys and and 94305.
I was perplexed when this kid was rejected by USC.
Aha, Mr. Singer and clients, thanks for using that spot for one of your finest student-athletes.
It all worked out for my kid, but how about the rest that were qualified, wanted to attend USC, but were rejected?


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