Maybe ‘compliance’ doesn’t mean what he thinks. An insurance and private equity executive has agreed to plead guilty to charges in connection with using fraud and bribery to cheat on the ACT exam on behalf of his daughter.
The U.S. Attorney’s Office said last week that Mark Hauser, 59, of Los Angeles, Calif., will plead guilty to one count of conspiracy to commit mail fraud and honest services mail fraud.
Hauser’s firm, started by his father, offers insurance services to private equity groups and their portfolio companies, including M&A advisory and due diligence services, placement of insurance solutions for all aspects of business risk, employee benefits advisory services, and 401(k) plan compliance.
The government will recommend a sentence of six months in prison, one year of supervised release, a fine of $40,000, and restitution.
Hauser is the 29th parent to plead guilty and the 42nd person overall to plead guilty in this case.
Last week, actress Lori Loughlin received a two-month prison sentence. Her husband, fashion designer Mossimo Giannulli, will serve five months after the couple pleaded guilty to conspiracy in the same scandal.
M&A deal terminated
Florida-based insurance brokerage firm Brown & Brown announced on Aug. 10 that it would acquire Hauser’s firm but abruptly called off the deal upon news of the guilty plea.
“Brown & Brown, Inc. announced today that it has terminated with immediate effect the previously announced agreement to acquire the assets of HAUSER,” the statement simply read. “The transaction was expected to close in September 2020, subject to certain closing conditions.”
Scandal details
As outlined in the charging document, Hauser agreed with William “Rick” Singer to pay an amount, ultimately totaling $40,000, to facilitate cheating on his daughter’s ACT exam.
As part of the deal, co-conspirator Mark Riddell traveled to Houston, where Hauser’s daughter took the exam, to proctor the test.
Instead, Riddell corrected the answers on the exam after she completed it. Two days later, Singer paid an intermediary, Martin Fox, $25,000, with the understanding that Fox would pass part of the payment on to Niki Williams, the test site administrator who allowed the cheating to occur. Singer also paid Riddell $10,000 for his role in the scheme.
Singer, Riddell, and Fox have previously pleaded guilty and are cooperating with the government’s investigation. Williams has agreed to plead guilty.