After months and months of charges stacking up against them in superseding indictments, Full House actress Lori Loughlin and her husband Mossimo Giannulli have agreed to enter guilty pleas for “conspiracy to commit wire and mail fraud to obtain property.” Under the terms of the college admissions scandal deal, Loughlin and Giannulli would receive modest punishments for the white collar offenses for which they were charged — that is, compared to what could have been on paper. Let’s presume the defendants acknowledge their guilt in open court and U.S. District Nathaniel Gorton accepts the plea agreement. Normally, that would be the end of the matter and everyone would move on, but the Michael Flynn case provides a possible roadmap for Loughlin and Giannulli to (1) expunge their records and (2) to pin down the Department of Justice on what the “interests of justice” really are.
Before you say “that’s crazy” and “that would be really risky and expensive,” let’s remember: money does not appear to be an object for them. Let’s also compare the origins of the college scam cases and the Flynn case to discuss some of the possible arguments. (After that, you can yell at me.)
Right now, it looks like Loughlin will serve two months behind bars and pay a $150,000 fine. She would also agreed to two years of supervised release and serve 100 hours of community service. Giannulli would get five months, pay $250,000, and get two years of supervised release with 250 hours of community service. Instead of taking 12 criminal counts to trial, they agreed to plead guilty to one each and avoid trial. But what if they found a way to delay sentencing? What if they fired their lawyers? What if they moved to withdraw their guilty pleas? What if they accused the FBI of setting them up or “getting them to lie“? And what if they argued that the charges against them were trumped up and that their conduct (while an abuse of power and privilege) did not rise to the level of actual bribery under the law, citing the recent Supreme Court Bridgegate decision?
Much digital ink has been spilled over the FBI’s behavior in the lead up to the interview that resulted in charges against Flynn. The Flynn defense said that the FBI not only wondered out loud whether their goal was to get Flynn to lie or get him fired, but federal prosecutors also withheld evidence favorable to Team Flynn in violation of discovery rules under the Brady doctrine. What’s more, critics say, the FBI had no business ever mentioning the Logan Act, since that’s an “unconstitutional” law that no one has ever been successfully prosecuted for violating.
General Flynn’s new team of lawyers, led by Sidney Powell, repeatedly hammered away at the prosecution, arguing that the exposure of “egregious” prosecutorial misconduct should result in a swift and complete dismissal of the case against President Donald Trump’s former National Security Advisor. This happened even though Flynn pleaded guilty in open court; even though Judge Emmet Sullivan himself expressed concerns about the circumstances of the FBI interview; even though Flynn was afforded opportunities to argue that the FBI entrapped him; even though Flynn was supposedly awaiting sentencing. Eventually, Bill Barr’s DOJ adopted the position of Flynn’s lawyers and agreed that the case should be dismissed forever. The DOJ didn’t really dispute that Flynn made false statements, but did say it couldn’t prove those statements were “material” — an element of the crime. Judge Sullivan has yet to dismiss the case. Without getting into more procedural specifics, this controversy may or may not drag out for a while.
But what if we told you that Lori Loughlin and Mossimo Giannulli have the resources and opportunity to use the DOJ’s decision-making in the Flynn case for their own benefit?
They weren’t “interviewed” by the FBI like Flynn was, but William “Rick” Singer was. Singer is the admitted mastermind of the whole Key Worldwide Foundation racket. His organization was ostensibly meant to help the underprivileged but actually helped the rich get their children into the college institutions of their choice. Rigging SATs, paying off admissions employees and coaches of college athletics programs, and even creating fake rowing profiles were all tactics which were not off limits. The fake rowing profiles are specific to the Loughlin-Giannulli case. Their daughters Olivia Jade Giannulli and Isabella Giannulli were each embarrassingly photographed on ergometers, and those photos were submitted as part of fraudulent college applications.
The celebrity parents were accused of “agree[ing] to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the [University of Southern California (USC)] crew team–despite the fact that they did not participate in crew.” The government went to great lengths to recite chapter and verse Mossimo Giannulli’s involvement in these applications. If you read about that, you’ll quickly see why his plea agreement contains a stiffer punishment than his wife’s.
But if you’re a person who was outraged by what the FBI did to Flynn, you should also feel sympathy for Loughlin and Giannulli. The origins of the case against them can be traced to phone calls recorded by the government in which Rick Singer lied about a fake IRS audit of his foundation. Indeed, Singer got on the phone and warned both Loughlin and Giannulli of a nonexistent audit in order to get them to say the incriminating things that the government wanted to hear.
CW-1 [Singer]: So I just want to make sure out stories are the same, because–
CW-1: –and th– and that your $400K was paid to our foundation to help underserved kids.
GIANNULLI: Uh, perfect.
CW-1: Okay? So I just want to make sure that we’re on the same page, in case–
CW-1: Who knows if they’ll call or they don’t?
GIANNULLI: Perfect. Got it.
CW-1: If you ever– ever were to say anything.
LOUGHLIN: So we– so we just– so we just have to say we made a donation to your foundation and that’s it, end of story.
CW-1: That is correct.
CW-1: I just wanted to make sure I touched base because I didn’t want you–
CW-1: –to all of a sudden what– like what’s this call coming from.
LOUGHLIN: Okay, yeah. Okay. Totally. All right. So–so that’s it. So it’s — it’s the IRS. It’s not anyone from USC, it’s the IRS.
CW-1: That is correct.
LOUGHLIN: Okay. Very good
To recap: In each case, Singer said the IRS was auditing his foundation, and the suspects agreed that, to get their stories straight, all they needed to do was say they made donations to help underprivileged kids, which Singer’s foundation purported to do but did the opposite. You might say the FBI ‘got Singer to lie to Loughlin and Giannulli’ — and that it worked. The defense argued that Singer’s notes showed the FBI coerced him to lie. Defense lawyers not only expressed outrage over alleged investigative misconduct, but also slammed federal prosecutors for withholding evidence thereof. Judge Gorton even signaled that there was an “entrapment” issue in the case. He ordered the government to explain itself, calling the coercion allegations “serious and disturbing.”
“In those notes Singer describes a troubling conversation. He indicates that an unidentified agent named ‘Liz’ and other unspecified ‘agents’ aggressively pressured him and directly instructed him to lie to elicit incriminating information from potential defendants,” Gorton wrote. This is what Singer’s “notes” said:
Loud and abrasive call with agents. They continue to ask me to tell a fib and not restate what I told my clients as to where their money was going — to the program not the coach and that it was a donation and they want it to be a payment.
Even though the government ultimately admitted it made an “error” in withholding Singer’s notes from the defense, the judge declined to dismiss the case, declined to hold an evidentiary hearing, and refused to throw out the recorded phone call evidence. The judge said he was satisfied with the government’s explanation and didn’t think they were lying.
Any of this sound vaguely familiar? How about this part: if all else fails, Loughlin and Giannulli could look to a Supreme Court decision from May on the 2013 New Jersey Bridgegate scandal to argue that there was no crime.
In Kelly v. United States, the Supreme Court threw out the fraud convictions of former New Jersey Gov. Chris Christie‘s (R) underlings, drawing a distinction between abuse of power and criminal bribery under the federal statute.
“The question presented is whether the defendants committed property fraud,” Justice Elena Kagan wrote:
The evidence the jury heard no doubt shows wrongdoing—deception, corruption, abuse of power. But the federal fraud statutes at issue do not criminalize all such conduct. Under settled precedent, the officials could violate those laws only if an object of their dishonesty was to obtain the Port Authority’s money or property. The Government contends it was, because the officials sought both to ‘commandeer’ the Bridge’s access lanes and to divert the wage labor of the Port Authority employees used in that effort. We disagree. The realignment of the toll lanes was an exercise of regulatory power—something this Court has already held fails to meet the statutes’ property requirement. And the employees’ labor was just the incidental cost of that regulation, rather than itself an object of the officials’ scheme. We therefore reverse the convictions.
It’s not hard to envision an attorney making the argument that Loughlin and Giannulli did not engage in a scheme to obtain property under the bribery statutes. As Law&Crime noted before on the prospect:
And the Supreme Court’s reasoning tracks heavily with an early April motion to dismiss filed by Loughlin’s and Giannulli’s defense attorneys. Their motion even cites many of the same cases. Law&Crime previously did a deep-dive into that April filing here.
“Since 1987, the Supreme Court has issued a series of rulings defining the statutes’ property limitation,” the defense motion notes. “As the Court has explained, that limitation must be strictly enforced to avoid overcriminalization and to take account of federalism and due process concerns. Those rulings have emphasized that the scope of the fraud statutes is limited to traditional forms of property.”
The alleged offenses and the facts of the Flynn and Loughlin-Giannulli cases are different. However, if the latter defendants really wanted to, they could attempt a similar procedural gambit as Team Flynn. They could theoretically lock in a light sentence on a plea deal, then fight the tactics through a political flank maneuver against the career DOJ prosecutors who targeted them. If the flank maneuver blows up, at least they didn’t risk a much harsher sentence by taking the route of a jury trial and conviction. But here’s the bottom line: Attorney General Barr likely wouldn’t give Lori Loughlin the same treatment as Michael Flynn, which should raise some questions in its own right.
Los Angeles criminal defense attorney Lara Yeretsian called the Thursday plea agreement a win for prosecutors who were caught red-handed withholding evidence favorable to the defense.
“This is a huge win for the prosecution and a superb opportunity to save face after the debacle of withholding Brady material,” Yeretsian said in a statement obtained by Law&Crime. “The college admissions saga is finally winding down with its most interesting figures finally caving.”
[Image via Paul Marotta/Getty Images]
This is an opinion piece. The views expressed in this article are those of just the author.