Even now, almost a year into the college admissions scandal, it’s difficult to fathom why rich and famous people brazenly cheat their kids’ way into a Georgetown or USC.
But the case of Michelle Janavs, a.k.a. the Hot Pockets Heiress, just might top them all.
To prosecutors, Janavs was just another ultra-rich parent who wielded her wealth to rig the system at other kids’ expense.
To her lawyers, she was a sheltered, gullible mother who fell for the siren call of the admissions adviser at the center of the so-called Varsity Blues scandal.
What’s undoubtedly clear is that Janavs is the heir to a great immigrant success story: the Hot Pocket, that crispy on the outside, warm and oozing on the inside microwavable pizza-like culinary convenience that’s been around since the early 1980s.
On Tuesday, U.S. District Judge Nathaniel Gorton in Boston sentenced Janavs to five months in prison after she pleaded guilty to rigging her daughters’ standardized test scores and fraudulently posing one as a beach volleyball recruit to her alma mater, the University of Southern California.
Her actions damaged “the entire system of education in this country,” Gorton said in handing down the sentence. “The monetary value of the harm she caused is incalculable.”
Prosecutors had sought 21 months in prison, saying Janavs was a repeated and active participant in the scheme. The judge said he would have sentenced her to a year had it not been for “your heartfelt remorse” and “good deeds.”
Her attorneys had argued that the 49-year-old took “full responsibility for her actions.” Imprisoning her wouldn’t have a deterrent effect as her “path from well-respected mother and philanthropist to scorned felon is on display for everyone to see,” the lawyers wrote last week.
Since Operation Varsity Blues laid bare the machinations behind admissions — and, with it, the anxiety of parents rich or not — one of the most curious aspects is why extraordinarily wealthy people resorted to illegal “side doors” rather than just relying on generous donations to secure spots for their children. Former Pimco Chief Executive Officer Douglas Hodge admitted to paying $850,000. Former TPG executive William McGlashan allegedly paid $50,000. He’s fighting the charges.
They are undoubtedly rich but not in the same realm as the Merage clan, with an estimated net worth of $4 billion, whose circle included people like Goldman Sachs Group Inc.’s Sharmin Mossavar-Rahmani and institutions such as the University of California schools. In 2005, the University of California-Irvine’s business school renamed itself in honor of Janavs’s father after he donated $30 million.
Their legacy of philanthropy was tainted when Janavs was arrested one morning last March for her role in the college-admissions scandal, handcuffed along with her daughters. The girls weren’t charged with wrongdoing, though both have been banned from the exclusive Sage Hill School where Janavs and Hodge served on the board of trustees.
A spokeswoman from Sage Hill declined to comment, citing the need to protect students’ privacy.
At first, Janavs insisted she was innocent. She reversed course after new charges were added, including allegations she’d used money from a foundation controlled by her father to get her son into Georgetown. Her plea made no reference to her son and her lawyers didn’t respond to requests for comment.
American Dream
Her predicament is incongruous with her family’s reputation. The Hot Pockets payout funded numerous charitable foundations through which two generations of family members conduct philanthropy. Paul and David Merage have made education and uplifting the disadvantaged cornerstones of their giving. For years, a family foundation that counted Goldman Sachs’s Mossavar-Rahmani as a board member awarded fellowships to immigrant college graduates to help them pursue further education, professional opportunities or otherwise chase their version of “the American Dream.”
The scandal’s confessed mastermind, Rick Singer, described the different routes to admission in calls recorded by the FBI in 2018. “There is a front door which means you get in on your own,” he said. “The back door is through institutional advancement, which is 10 times as much money. And I’ve created this side door in.”
Conceivably, a family that endowed a top-tier business school with $30 million wouldn’t need a side door. Yet Janavs admits that she agreed to pay $300,000 to have a proctor correct her daughters’ standardized test scores and to promote one as a beach volleyball player.
Ideal Target
Janavs’s attorneys said her anxieties about her daughters’ college prospects made her the “ideal target for Rick Singer” and insist Singer persuaded her that her daughters should go to USC and that the only way to achieve that was by cheating. Janavs didn’t know of the fake athletic profile and believed the money would be donated to USC, they claim.
Janavs has “dedicated her time and resources to closing the opportunity gap between wealthy and working-class kids,” her lawyers wrote.
It’s a tenet in line with the Merages’ charitable goals.
“It is our family’s tradition to promote education as a means of improving life conditions and successful life outcomes,” states the website of a foundation named for the brothers’ parents. The Merage family didn’t respond to emails and phone messages requesting comment.
Wealthy families face distinct risks when members run afoul of a clan’s carefully constructed image and values. The Merages appeared to be particularly aware of the importance of a good public persona. Their family offices’ websites are professional and relatively transparent, with details on some investments and the origin of their wealth. Family members have spoken openly about their investments, heritage and the challenges of being an heir. David’s 34-year-old daughter, Sabrina, once ran a reputation-management consulting firm targeting high net-worth individuals.
‘Question Marks’
“You don’t want [the scandal] to start putting question marks into what’s already happened in terms of donations,” said Eliot Wilson, head of research at London-based reputation management firm Right Angles. “Obviously there’s a very important reputational aspect of being a well-known philanthropist who’s given generously and nobly. You don’t want that tainted in any way.”
Janavs’s guilty plea is probably the best way for the family to draw a line under the disgrace, he said. “They’ll need to take this on the chin.”
–With assistance from Ben Steverman.
This article was provided by Bloomberg News.
