USC blocks students embroiled in admissions scandal from registering for classes, receiving transcripts

A view of people visiting the University of Southern California on March 12, 2019 in Los Angeles, California. Federal prosecutors say their investigation dubbed Operation Varsity Blues blows the lid off an audacious college admissions fraud scheme aimed at getting the children of the rich and powerful into elite universities. AAllen J. Schaben | Los Angeles Times | Getty Images

The University of Southern California has blocked students who were linked to the admissions scandal from registering for classes and getting their transcripts.

Among the students enrolled in USC are the daughters of “Full House” actress Lori Loughlin and her husband, designer Mossimo Giannulli, whom federal prosecutors charged with paying $500,000 in bribes to get their daughters Olivia Jade and Isabella Giannulli into the school.

Charges in the $25 million scheme were announced last week against 50 people. The allegations included parents bribing college athletic coaches and administrators, having other people take admission tests for their kids and hiring people to correct incorrect answers on standardized tests.

“USC has placed holds on the accounts of students who may be associated with the alleged admissions scheme; this prevents the students from registering for classes or acquiring transcripts while their cases are under review,” the school announced on Twitter on Monday.

“Following the review, we will take the proper action related to their status, up to revoking admission or expulsion,” the school added.

According to the indictment, Loughlin allegedly told a cooperating witness that she would have her daughter pose for a photograph on a rowing machine in order to boost her daughter’s college application, which falsely claimed she was on a crew team.

Loughlin’s daughter Olivia Jade, a social media personality with 1.4 million Instagram followers, was reportedly on a yacht owned by a top USC official when the indictment was released last Tuesday. Two days later, two of her advertising partners — Sephora and TRESemme — announced they were no longer working with her.

Loughlin was released on $1 million bond on Wednesday. A day later, Hallmark Channel announced it had fired her from the show “When Calls the Heart.”

An attorney for Loughlin, Perry Viscounty, did not immediately reply to a CNBC request for comment.

College students on Thursday filed a $5 million class-action lawsuit against the eight universities named in the scheme: USC, Stanford, UCLA, the University of San Diego, the University of Texas, Wake Forest, Georgetown and Yale.

Federal prosecutors have said the schools were victims of the scam.

USC said it has fired two employees associated with the allegations and has placed on leave a faculty member who was named as a parent in the indictment.

“We are in the process of identifying donations that may have been received in connection with the alleged scheme and will determine how best to redirect those funds to a non-USC organization that will benefit underserved students,” the university said in a statement.

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