A Los Angeles businessman whose tip ignited the biggest U.S. investigation ever into a college admissions scheme got a year in prison even after cooperating with prosecutors in an unrelated pump-and-dump securities case.
Morrie Tobin, who was sentenced on Wednesday in federal court in Boston, had asked the judge to spare him the eight to 10 years behind bars he could have gotten for securities fraud and sentence him instead to five years’ probation and a $4 million fine.
But U.S. District Judge Nathaniel Gorton noted that Tobin was involved in two pump-and-dump schemes that defrauded “innocent investors” of $15 million over five years, and said he had to spend some time in prison. Gorton said his “extraordinary” cooperation entitled Tobin, 57, to “a large and unprecedented discount” off his term.
“I have never before in my 28 years as a judge granted an 80 or 90 percent reduction to a defendant facing an eight-year sentence,” Gorton said.
Prosecutors, too, had recommended probation, in a major break from U.S. sentencing guidelines of 97 to 121 months for Tobin’s crime.
“I’m extremely, sincerely sorry and ashamed of my actions,” Tobin told the judge before receiving his sentence. “I tried to do everything possible to make amends.”
The judge said he accepted Tobin’s remorse but that his motive was “pure and simple greed.”
Tobin, who was also ordered to forfeit $4 million, appeared in person in Gorton’s courtroom with his attorney Brian T. Kelly. As a former federal prosecutor, Kelly won racketeering and murder convictions against the notorious Boston mob boss James “Whitey” Bulger.
After the judge had rejected probation early in the hearing, Kelly asked him to sentence Tobin to house arrest instead.
“It’s a terrible message to say you can cooperate with the government for hours and hours and you’re still going to jail,” Kelly said.
Kelly alluded to the price Tobin and his family had paid since his decision to cooperate in a case brought against dozens of parents was leaked to news reporters.
“He has been in a form of a prison of his own for several years,” Kelly said. “He’s been crushed by this case. His family’s been in upheaval over this.”
Tobin was under investigation for the stock scheme in 2018 when he told the government that Yale University women’s soccer coach Rudy Meredith was accepting bribes to designate unqualified students as soccer recruits, according to court filings. Tobin had played hockey at Yale.
“He told the government about the corrupt Yale soccer coach,” Kelly told Gorton in an impassioned speech to spare his client from prison.
It was the first time in open court that Tobin was revealed as the college scandal tipster.
Meredith cooperated with the Federal Bureau of Investigation in the pump-and-dump probe and admitted last year to taking more than $860,000 from parents determined to get their children into the elite school. The bribes were brokered through a phony charity run by corrupt college admissions strategist William “Rick” Singer. Singer cooperated with the government in the college scam case, secretly recording phone calls with his clients.
More than 50 people have been charged in the college case. Of the 38 parents accused, 28 have admitted guilt, including actor Lori Loughlin and her husband, fashion designer Mossimo Giannulli, who are to be sentenced on Aug. 21. Ten parents are scheduled for trial next year. None of the colleges or students swept up in the scandal were charged.
The pump-and-dump schemes run by Tobin and several others involved Swiss asset management firm Silverton. Silverton founder Roger Knox pleaded guilty this year to running a much larger global securities fraud that netted $164 million, according to the Justice Department. Pump-and-dump schemers boost the price of a stock they own, using phony recommendations, and then sell it to make money before it crashes.
This article was provided by Bloomberg News.
