Actress Lori Loughlin and her husband, Mossimo Giannulli, gave money to a nonprofit that made “legitimate donations” to universities, they did not pay bribes to get their daughters into the University of Southern California, an attorney for the celebrity couple said in federal court Tuesday.
William Trach, representing both defendants, previewed the defense argument during a mostly procedural hearing in which Loughlin and Giannulli addressed conflicts of interest that their attorneys could face in the nation’s college admissions scandal.
It marked the couple’s first appearance in court since they pleaded not guilty to mail fraud and money laundering charges in April. Both chose to keep their attorneys ahead of a potential trial despite warnings from federal Magistrate Judge Page Kelley about “very serious risks" with the conflicts.
Trach was responding to comments by Assistant U.S. Attorney Eric Rosen, who said Loughlin and Giannulli knowingly paid Rick Singer $500,000 to orchestrate a scheme in which bribes were funneled to USC employees who agreed to help designate their daughters as crew recruits.
“There’s zero evidence in this case of that,” Trach said, adding that the checks his clients wrote were to USC and The Key Worldwide Foundation, which he said gave “legitimate donations to schools across the country.”
“On that, my clients have a united front,” he said.
Loughlin, star of “Full House,” and Giannulli, a fashion designer, are accused of paying Singer, a college consultant and the founder of the nonprofit Key Worldwide Foundation, to get daughters Olivia Jade and Isabella Rose into USC as crew athletes even though neither were athletes.
Tuesday’s hearing was over after about 45 minutes, and the two left the courtroom holding hands. The couple avoided the media scrum at the front of the courthouse, slipping in through a back door, and declined to comment as they left the courtroom.
Prosecutors argue Singer's nonprofit was a sham created to take payments from wealthy parents who sought to take part in an elaborate cheating and bribery scheme. Some paid to have college coaches accept their children as competitive athletic recruits, prosecutors say, while others paid Singer to have someone take the ACT or SAT exam for their children to get them admitted into elite universities.
Prosecutors say Donna Heinel, senior associate athletic director at USC, and Laura Janke, the school's assistant women’s soccer coach, participated in the scheme involving Loughlin's daughters and were paid by Singer. Janke has admitted to fabricating the fake crew profiles for their daughters. Heinel has pleaded not guilty to charges.
On the issue of conflicts, prosecutors flagged three instances where the attorneys hired by Loughlin and Giannulli could be compromised.
Kelley called them “actual conflicts” but nonetheless decided to let the couple proceed with the law firm they share, Boston-based Latham & Watkins. She said she will continue to review Giannulli's separate counsel, Donnelly, Vonroy & Gelhaar, but is "inclined" to allow it.
Kelley allowed the couple to keep Latham & Watkins, even though she said a potential conflict could arise if a disagreement emerges between the two defendants.
Kelley told the couple that every defendant has a right to an attorney with “undivided loyalty to you alone,” adding that it’s impossible to know how the case will evolve. “No one can say they know everything that will happen down the road.”
“Your counsel may not be able to conduct an independent investigation of the facts of your case,” she said.