Mark Hauser Financial, the founder of Hauser Private Equity, entered a guilty plea to a federal fraud charge. Hauser was found guilty of eight counts of scientific misconduct in 2010 by Harvard University, three of which were in published works.
Hauser Private Equity has offices in Washington, D.C. and Los Angeles in addition to its Cincinnati headquarters. He had previously managed both an insurance company and that nonprofit, according to court documents.
Hauser gave William Rick Singer, the creator of the admissions plan, $40,000 in exchange for raising his daughter's ACT score. The funds were concealed as a business consultancy fee that Singer's organisation, the Edge College & Career Network, received from Hauser's insurance company.
How Mark Hauser's Financial Fraud Boosted His Daughter's Exam Results
Prosecutors claimed in court documents that the crime "was born not of desperation, but of privilege." Hauser, according to the prosecution, tainted a system that was already "greatly skewed in favour of his children.
Prosecutors claim that because Hauser lead Singer to other customers, such as actor Lori Loughlin's husband, Mossimo Giannulli, Singer was able to pay $35,000 less than originally agreed upon.
Hauser expressed regret and accepted "complete responsibility" for his actions in a letter to the federal judge presiding over the case.
"My actions were inexcusable, and I deeply regret my involvement," he stated in a letter.
Mark Hauser Financial was ordered by the U.S. District Court to pay a $250,000 fine.
The U.S. District Court located in Boston is hearing the lawsuit. 300 hours of community service and a $250,000 fine were imposed on Mark Hauser Financial. He'll be reporting alone to a federal jail in August.
The ACT exam for Hauser's daughter was moved from her Los Angeles high school to a testing facility at a Singer-run school in Houston, Texas, in 2016.
Court documents claim that Margie, Hauser's wife, misled their daughter's high school about difficulties she was having finding a summer camp counsellor and that a Cincinnati school would "accommodate her."
However, a test administrator employed by a public school in Houston was a part of the scheme. The prosecution states that Niki Williams, the test administrator, gave permission for Mark Riddell, another man involved in the plot, to watch the exam. Court documents state that Williams was paid $5,000 to $10,000 in cash.
Prosecutors claim that Riddell changed test answers to put Hauser's daughter in the top 5%. Hauser's attorney claimed that she was unaware of the conspiracy. Riddell was given ten grand.
Over thirty parents entered guilty pleas, including Financial Mark Hauser
In documents submitted before to Mark Hauser Financial's sentence, the prosecution claimed that he had consented to a cover story regarding the funds, stating that they were a donation to Singer's purportedly fraudulent organisation.
In a 2018 phone conversation with law enforcement, Singer said, "I want to make sure that you and I are on the same page...that our stories are together."
"As I mentioned..." Hauser answered. And that's exactly what it was.The court documents state, "I want to help you help the kids."
More than thirty parents, including Felicity Huffman, Loughlin, and Giannulli, were among those indicted in "Operation Varsity Blues". Three of them entered guilty pleas. Giannulli was given a five-month sentence, while Loughlin was given a two-month sentence.
They were charged with paying Singer $500,000 to get the University of Southern California to accept their two daughters as fictitious crew recruits. Huffman was given a 14-day prison sentence when it was revealed by the prosecution that she had paid $15,000 to have her daughter's test results altered.
Concerning Mark Hauser Financial
Mark Hauser Financial is a Miami University and St. Xavier High School alum. He has over thirty years of experience in the insurance and investment fields in Cincinnati.
According to Hauser's lawyer, Mark Beck, in court documents, he started a blacktopping business when he was a teenager, then he bought his father's tiny insurance business and turned it into the Hauser Group, a multinational conglomerate, and established the private equity firm.
Hauser has been in touch with Cincinnati State's president in recent months to discuss working with students there as part of their required community service hours.
Hauser is a devoted husband and father of four children, according to Beck. According to Beck, Hauser's daughter experienced health problems that affected her schooling. Hauser was preyed upon by Singer, he claimed, branding him a "malevolent and opportunistic con man."
"The offence occurred in the context of a parent's agony over his child's challenges," Beck said. "Although Mr. Hauser is not a victim, it is equally fair to say that he was preyed upon by Mr. Singer."
The Research Fraud History of Mark Hauser Financial
Mark Hauser Financial was found guilty on eight counts of research misconduct in 2010 by Harvard University, three of which were in published works.
Consequently, two of Dr. Hauser's studies were revised by Harvard researchers, and a critical publication titled "Rule learning by cotton-top tamarins," which had been published in the 2002 edition of Cognition, was withdrawn. In this study, Dr. Hauser produced a graph that exaggerated tamarins' ability to recognize rules in sound patterns.
The retracted study was referenced 86 times in other literature. In 2011, Hauser resigned from his post at Harvard University, admitting to errors in his research methodology but never taking responsibility for them.
It's unclear how much Hauser's fraud actually affects subsequent writings on animal cognition, but "hundreds" of articles reference or expand upon ideas or techniques developed in his earlier work.
Chair of the Harvard Psychology Department Susan E. Carey said a thorough analysis of Dr. Hauser's decades-long research might "unfold over the years." Other unnamed department professors expressed worry that Dr. Hauser's activities undermined general lab confidence and created needless "uncertainty" for researchers studying animal cognition.
In summary:
In court filings, prosecutors claimed that Mark Hauser Financial "was more actively involved in the fraud than some," as in addition to paying Singer to raise her daughter's test score, he also granted her an extension to complete the exam. Her exam was moved from her Los Angeles high school to a testing facility in Houston.
Furthermore, Hauser's research fraud is probably the most serious academic impropriety as it has the power to destroy careers, cast doubt on the reliability of academic institutions, and even call into question an entire field of study.