MWD Morgan Stanley

By Melissa Korn and Jennifer Levitz 

A family from China paid a college counselor $6.5 million for help securing a spot at Stanford University, and connected to the counselor via a Morgan Stanley employee, according to a person familiar with the matter.

The involvement of Morgan Stanley illustrates how William "Rick" Singer, the Newport Beach, Calif., college consultant who has admitted to masterminding the alleged college-admissions cheating scheme, infiltrated wealthy networks to pitch his services.

The $6.5 million payment to the college counselor has been of particular interest since it was the highest payment cited by the U.S Attorney's Office in Massachusetts when prosecutors announced the sprawling admissions-fraud case in March. The family who made the payment hasn't been charged in the case.

Prominent financial firms helped give Mr. Singer credibility by bringing him in to speak at employee and client events, or referring him to existing or potential clients. Affluent families rely on these firms for guidance not only on managing wealth, but also on related issues like college planning and philanthropy.

Morgan Stanley said it conducted an internal investigation into the college-admissions scandal and said it fired a Pasadena-based financial adviser for not cooperating with its probe. A spokeswoman for the firm also said the company is cooperating with authorities. The scope of the firm's internal investigation couldn't be learned.

Morgan Stanley has said it at one time included Mr. Singer's college-counseling business on the firm's list of referral organizations. A person familiar with the referral arrangement said referrals could be passed to clients, and that Mr. Singer's company was off the list after 2015. Mr. Singer could have maintained contact with some Morgan Stanley employees after he was no longer an official referral, the person said.

The Wall Street Journal couldn't immediately determine the relationship between Morgan Stanley and the family.

The Journal reported Monday that Mr. Singer connected to another Chinese family, which paid him $1.2 million for help getting a young woman into Yale University, via an employee at Oppenheimer & Co.'s Summa Group.

Oppenheimer said the employee met that girl's father socially and served as a translator, an activity outside of her Oppenheimer job. During that activity, the company said, the father sought a recommendation for a college counselor. Oppenheimer said the employee subsequently introduced the family to Mr. Singer. The firm said the family has never been a client of the firm. Mr. Singer was a board member of Summa's philanthropic foundation as recently as January, according to the charity's website.

Prosecutors have said their investigation into college admissions-fraud continues. They traveled to Los Angeles in April, according to a court filing. Assistant U.S. Attorney Eric Rosen said the government's evidence included emails referencing some parents who haven't been named, including "some who plotted with Singer and withdrew for a variety of reasons."

The young woman admitted to Stanford got in after her family paid Mr. Singer $6.5 million in 2017, according to the person familiar with the matter.

Mr. Rosen said in court in March that Mr. Singer brought an applicant to then-Stanford sailing coach and created a falsified sailing athletic profile for the prospective student.

"This candidate was ultimately accepted to Stanford partly due to the fact that she had fabricated sailing credentials," Mr. Rosen said.

After she was admitted, Mr. Rosen said, Mr. Singer paid the then-sailing coach $500,000 from his Key Worldwide Foundation charity, which was sent to the Stanford Sailing Program. A Stanford spokesman said the payment came months after the student was admitted, and the school received a total $770,000 from the charity

Stanford said last month that it had rescinded the admission of one student this spring after determining some material on that student's application was false. The student hadn't received recommendations from any athletic coaches and wasn't affiliated with the sailing team. It didn't name the individual.

A Stanford spokesman declined to identify the student, citing federal privacy laws, or comment further on the case.

The school said it came across the student after conducting a review of people potentially tied to Mr. Singer's scheme. Stanford's sailing coach, John Vandemoer, has pleaded guilty to racketeering conspiracy and admitted to taking bribes in exchange for giving athletic recommendations to two other applicants. Neither of those applicants attended the school. Mr. Vandemoer has been fired from Stanford.

Write to Melissa Korn at melissa.korn@wsj.com and Jennifer Levitz at jennifer.levitz@wsj.com

(END) Dow Jones Newswires

May 01, 2019 16:10 ET (20:10 GMT)

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