Road to SAT cheating scandal leads to Wall St.

Karen Rubin

Great Neck has the dubious distinction of being the epicenter for the SAT cheating scandal that has now ensnared 20 teenagers.

The likelihood is that cheating is a national, even international problem, only exposed here because of the high values of our school administrator.

“I think it’s widespread across the country,” Great Neck North High Principal Bernard Kaplan said “We were the school that stood up to it.”

No matter, it is Great Neck that gets the headlines.

The SAT scandal is just the latest to emerge from our area – the Madoff Ponzi scheme also has its roots in our neighborhood, along with hundreds of Madoff victims.

The crimes are related, and speak to the inequity of our society, which heaps monstrously outsized wealth as well as power to those who get to the top by hook or by crook, and to a justice system which similarly is imbalanced in favor of those who have reached levels of power and influence. The consequence is a culture that supports cheating as another calculated risk-reward business decision.

The crimes also speak to the decline of mobility – if merit really propelled you to the top, there would not be the need to cheat. But as we see, education, widely regarded as the ticket to that train of upward mobility, is not equal, nor are there enough career paths to success.

The SAT cheating scandal is heinous: students cheat to get into increasingly competitive colleges – not so much because of a rah-rah college experience but because of the recognition that going to a handful of colleges puts you into that good ol’ boys network to get better jobs, higher income, and ultimately greater power when they get out, especially when so many college graduates these days are finding it harder and harder to get decent jobs.

On the one hand, you might feel a tinge of sympathy, in a survival-of-the-fittest sort of way, except that they took those coveted spots from more deserving students – perhaps your own children – who played by the rules only to come up short.

In some ways, the SAT fraud is a rehearsal for what lies ahead in the business world. With outright manipulation of markets, insider trading and the Ponzi schemes that were epidemic in the ultra-laissez-faire environment of the Bush era, honest brokers, business people and companies could not compete on any manner of a level playing field. As whistleblower Harry Markopolos reported in his frantic, even heroic attempts to get the SEC to listen to him about Madoff’s fraud, he was being pressured by his superiors to match Madoff’s phony results.

Similarly, the SAT (and now ACT) cheating took place in an atmosphere that was remarkably conducive for cheating, enabled by the College Board and Educational Testing Service, which administrates the test and preferred keeping quiet about cheating in order to protect the image that the standardized tests are the be-all tool for colleges to choose their best candidates.

Horror over the SAT cheating scandal was sufficient for the state Senate Committee on Higher Education to call for hearings last Oct. 25.

“For a person in high school, this test will determine the future course of their life, what college they will get into, and what will yield from that education as they move into adulthood,” state the committee’s chairman, state Sen. Kenneth P. LaValle (R-C-I, Port Jefferson). “Cheating on the SAT is wrong, and the committee will have to consider whether it is indeed criminal…

“We are at a juncture because education is critically important – it gives one a ticket to their success. This committee – our Legislature and our society- cannot tolerate where one group of students played by different rules, that give them an advantage over other students who want that ticket, but are playing by the rules in an honest way, and believe in their hearts they are on a level playing field…”

North High principal Kaplan, who basically blew the whistle on the North High students and called for criminal investigation when the College Board and Educational Testing Service were disinclined, told the senators that cheating goes on because ETS makes it ridiculously easy to cheat and the risk-rewards calculation encourage cheating.

“ETS has made it very easy to cheat, very difficult to get caught” Kaplan said. “To top it off, on the rare occasion a cheater is found out, the cheater is not prosecuted.”

Two million tests are taken a year at 7,000 test centers in 170 countries. Out of these, ETS says there were 6,000 reports from test center supervisors of irregularities; of these, 2,500 test results were analyzed and 1,000 test scores were canceled, the ETS reported. The reason for canceling the scores is when there is a suspiciously large (over 250 points) change from prior test score.

Of the 1,000 tests that were canceled, ETS estimated there were 200-300 cases where impersonators took the test for someone else, and of those, ETS estimated 10 were paid a fee.

ETS said it only seeks criminal prosecution if the fee is deemed “substantial.”

Sam Eshaghoff, 19, now a student at Emory University who completed his freshman year at the University of Michigan after graduating Great Neck North, was one of those accused of impersonating test-takers, allegedly collecting $1,500 to $2,500 apiece, could face four years in prison if he is found guilty.

Others charged with taking the test for others include Joshua Chefec, 20, now a senior at Tulane, and Michael Pomerantz, 18, both of whom attended Great Neck North; Adam Justin, 19, a graduate of North Shore Hebrew Academy and a student at Indiana University; and George Trane, 19, a graduate of Great Neck South who now attends SUNY Stony Brook.

In other instances, the playing field has become unleveled and justice unequal.

Take for example Park Avenue lawyer Marc Dreier, who grew up on the South Shore of Long Island, sentenced to 20 years in prison for bilking hedge funds out of $700 million.

Raj Rajaratnam, the hedge fund billionaire at the center of one of the largest insider trading cases in history, was sentenced to 11 years in prison. That was the longest prison terms ever for insider trading, according to the Justice Department, but it was also substantially less than what the prosecution had sought against the man it called “a billion-dollar force of deception and corruption on Wall Street.” The 54-year-old Rajaratnam, who headed Galleon Management, was convicted in May on 14 counts of conspiracy and securities fraud for illegally using inside information to trade in stocks such as Goldman Sachs, Google, Hilton and Intel. The trading generated profits or avoided losses of $72 million, the government estimated.

But there are numerous instances that make “Les Mis,” which Great Neck North just presented, seem like a reality show in 21st century America.

In California, Gregory Taylor, a homeless man, was sentenced to 25 years for trying to break in to a church kitchen to find something to eat. He was only freed in August 2010 after serving 13 years. That’s 13 years for attempting to steal food from a church.

In Ohio earlier this year, Kelly Williams-Bolar, a single mother of two, was sentenced to 10 days in jail and placed on three years probation after sending her kids to a school district in which they did not live. She was convicted on two counts of tampering with court records after registering her two girls as living with her father when they actually lived with her in the housing projects in Akron. Additionally, her father, Edward L. Williams, was charged with a fourth-degree felony of grand theft, in which he and his daughter are charged with defrauding the school system for two years of educational services for their girls. The court determined that sending their children to the wrong school was worth $30,500 in tuition (though apparently, nothing was taken off for the tuition that would have been paid to her own district’s school). To add another dramatic element, she was going to school to become a teacher so that she could create a better life for her girls – good luck with that, now that she has a record.

In another case, a federal judge in Mississippi sentenced Anita McLemore, a mother of two, to three years in federal prison for lying about a drug arrest on a government application in order to obtain food stamps, Mike Taibbi reported in Rolling Stone.

“The total cost of her fraud was $4,367. She has paid the money back. But paying the money back was not enough for federal Judge Henry Wingate,” he reported.

“Wingate had the option of sentencing McLemore according to federal guidelines, which would have left her with a term of two months to eight months, followed by probation. Not good enough! Wingate was so outraged by McLemore’s fraud that he decided to serve her up the deluxe vacation, using another federal statute that permitted him to give her up to five years.

“He ultimately gave her three years, saying, ‘The defendant’s criminal record is simply abominable …. She has been the beneficiary of government generosity in state court.’

But, Taibbi continues, “Compare this court decision to the fraud settlements on Wall Street. Like McLemore, fraud defendants like Citigroup, Goldman Sachs, and Deutsche Bank have ‘been the beneficiary of government generosity.’ Goldman got $12.9 billion just through the AIG bailout. Citigroup got $45 billion, plus hundreds of billions in government guarantees.

“All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we’ve come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000 respectively, for lying to shareholders about the extent of Citi’s debt.

“Neither man was forced to admit to intentional fraud. Both got to keep their jobs.

“Anita McLemore, meanwhile, lied to feed her children, gave back every penny of her ‘fraud’ when she got caught, and is now going to do three years in prison. Explain that, Eric Holder!

“You get busted for drugs in this country, and it turns out you can make yourself ineligible to receive food stamps.

“But you can be a serial fraud offender like Citigroup, which has repeatedly been dragged into court for the same offenses and has repeatedly ignored court injunctions to abstain from these practices, and this does not make you ineligible to receive $45 billion in bailouts and other forms of federal assistance.

“A normal person, once he gets a felony conviction, immediately begins to lose his rights as a citizen.

“But white-collar criminals of the type we’ve seen in recent years on Wall Street – both the individuals and the corporate ‘citizens’ – do not suffer these ramifications. They commit crimes without real consequence, allowing them to retain access to the full smorgasbord of subsidies and financial welfare programs that, let’s face it, are the source of most of their profits.”

These situations speak to both the lack of equality and the lack of mobility in our society – in education, in careers, in access to food and housing, in our fundamental societal institutions of politics and the justice system – and is also at the heart of the Occupy Wall Street protest.

There have been no prosecutions for those who victimized homeowners in Hempstead – pushing subprime mortgages when the homeowners qualified for conventional mortgages, causing many to lose their homes to foreclosures.

Nothing happened to the Goldman Sachs traders who lied to investors, telling them that mortgage-backed securities were a great investment when they knew they were junk, bet on them to fail and made millions when they did.

Nothing happened to the Enron traders who giggled over manipulating electricity supply to push up rates and the value of their options, while leaving granny having to choose between paying for heat or food.

Crashing the economy and taking with it trillions of dollars sucked out of people’s home values, 401Ks, IRAs, college funds and life savings, and nothing happens.

Betraying the identity of a CIA agent, nothing.

Lying a country into war, using intelligence that was known to be “cooked,” that caused the death of 4,500 Americans and more than 100,000 Iraqi civilians, and a $1 trillion, and no one is held accountable.

Lying and cheating have become part of the risk-reward equation. Who wouldn’t take that gamble to get into that privileged club?

But it is wrong and goes to the heart of how the very fabric of the ideals this country was founded upon have been corrupted.

Right now, our students are learning the wrong lessons, admiring the wrong role models. And yet, it is horrifying to contemplate that the young people who are charged with impersonating test-takers for a fee could do more actual prison time – four years – than the Wall Street banksters who defrauded and bilked people out of billions of dollars.

The corruption of these fundamental institutions is deep, and is what the Occupy Wall Street protesters are so angry about, especially as they see more of the protesters arrested than those whose crimes impacted millions.

But this week, there was a sign that their protestations are making an impact.

This week, for the first time, a federal judge is pushing back against an SEC settlement which would allow the bad actor to merely pay a fine without admitting guilt.

Federal Judge Jed Rakoff struck down a $285 million settlement that Citigroup reached with the Securities and Exchange Commission (apparently the settlement was announced the same day as the suit), saying that there was an overriding public interest in knowing the truth about the financial markets. He expressed concern that no one was named.

That’s the thing about these anonymous corporate slaps on a virtual wrist: what about the individuals who were the architects of the wrong-doing, who were richly rewarded for their dirty deeds and yet got to keep the rewards?

Accountability is important. Fairness and equity are also.

And what about the teenagers who did their own dirty deal? On which side of the equation are they? The corporate banksters, the Ponzi schemers, the Wall Street defrauders? Or the food stamps mother?

The students who paid the stand-ins and won acceptance into college, and who are charged with a misdemeanor, should have their admissions reevaluated to purge the benefit of the fraudulent SAT grades, and if the new examination results in being expelled, so be it.

Those who are alleged to have been paid to take the test face a much harsher prosecution. What they are accused of is a crime, surely, but if they are found guilty, should their lives be ruined? The reasonable, equitable punishment would be probation, not prison, and community service. They should have the opportunity to make restitution and reclaim their reputation.

But, as we see, the punishment doesn’t always fit the crime: it depends more on how much of an example a judge might want to make – to make an example of a parent who enrolls her child in a better school district, or lies to get food stamps. And in this case, the desire to “set an example” could go against those children from such a privileged place as Great Neck.

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