Two parents convicted in the sprawling “Varsity Blues” college admissions scandal had their fraud verdicts overturned, in a surprising blow to prosecutors who racked up dozens of guilty pleas and jail terms in a nationwide FBI sting.

John B. Wilson, chief executive officer of Hyannis Port Capital, and Gamal Abdelaziz, a former Wynn Resorts Ltd. executive, won the decision Wednesday at the federal appeals court in Boston. They were convicted in October 2021 in the largest university admissions corruption case ever brought in the US. The appeals panel upheld Wilson’s conviction for filing a false tax return.

After parents ranging from sitcom stalwart Lori Loughlin to former Pimco chief executive officer Douglas Hodge admitted to taking part in the scam to cheat their kids’ way into elite institutions, Wilson and Abdelaziz were the first to fight the charges by going to trial.

The two were found to have conspired with disgraced college admissions strategist William “Rick” Singer, the mastermind of the fraud. They received some of the longest prison terms imposed on parents in the case, which ensnared more than 50 mothers and fathers, college coaches and others.

A spokeswoman for Massachusetts US Attorney Rachael Rollins said the office is reviewing the ruling and assessing next steps. It’s unclear what impact the appeals court’s ruling will have on other convictions.

Big Payments

Prosecutors said the parents paid bribes through Singer to arrange for their children’s admission as recruited athletes or used his illicit services to boost their admissions test scores.

Singer, who pleaded guilty and cooperated with the US against the parents, was sentenced in January to serve 3 1/2 years in prison, forfeit $8.7 million and pay more than $10.6 million in restitution to the Internal Revenue Service.

A Boston jury heard evidence that Wilson had paid Singer more than $200,000 to get his son into the University of Southern California as a purported water polo recruit and $1 million more to get his twin daughters into Harvard and Stanford. He was sentenced to 15 months in prison.

Abdelaziz was accused of paying $300,000 to get his daughter into USC as a basketball player, even though a former classmate testified that she wasn’t good enough to make her high school’s varsity team. He got a year behind bars.

Both men were allowed to remain free while appealing.

“Mr. Abdelaziz has maintained his absolute innocence from day one and is enormously grateful that the appeals court has reversed his unfair conviction,” his attorneys, Brian T. Kelly and Joshua C. Sharp, said in an email.

Wilson’s attorney, Noel Francisco, also hailed the ruling’s reversal of all the bribery, fraud, and conspiracy charges.

“It confirms what we’ve known from the beginning — John Wilson’s case is fundamentally different from others in the broader Varsity Blues scandal,” Francisco said in an email, adding that he’s reviewing the ruling to determine next steps. “His children were all qualified for admission to these schools on their own athletic and academic merits, and none of his money went to enrich any coach but, rather, was directed to the schools themselves.”

Read More: Varsity Blues Dads Fight for Their Freedom Amid Their Appeals

Lawyers for both men argued during their appeal hearing in November that their clients hadn’t been part of the alleged conspiracy and that they were prevented from presenting evidence at trial showing they believed the payments were legitimate donations.

The three-judge appeals panel concluded “the government failed to prove that Abdelaziz or Wilson agreed to join the overarching conspiracy among Singer and his clients charged in the indictment.”

The introduction by the government of “powerful evidence” of wrongdoing by other parents created “an unacceptable risk that the jury convicted Abdelaziz and Wilson based on others’ conduct rather than their own,” US Circuit Judge Sandra Lea Lynch wrote in the 156-page order.

On a broader note, the appeals court said the case shows the need to be “cautious about criminalizing conduct, even unethical conduct, in this complicated area affecting so many students and parents.”

“We do not say the defendants’ conduct is at all desirable,” Lynch wrote.

Bribe or Gift?

Harvey Silverglate, a Boston-based criminal defense lawyer, said in an interview that the conviction of Wilson and Abdelaziz had raised “the profound legal and ethical question of where to draw the line between a legitimate gift and a bribe.”

Silverglate, who wasn’t involved in the case, noted that when Wilson’s son was applying to USC, a school athletic official told Wilson to donate to the school’s water polo team through Singer’s organization as a way to boost the boy’s chance of being accepted. Silverglate said such donations are legal.

“Having not known about the true nature of Singer’s operation, Wilson could not have conspired with him in the first place,” he said.

Even as Wilson and Abdelaziz fought it out, dozens of other parents, many of them prominent in their professions, pleaded guilty to participating in the racket and then were sentenced to jail terms ranging from two weeks to nine months.

Along with Loughlin and Pimco’s Hodge, they included California winemaker Agustin Huneeus, former Willkie Farr & Gallagher LLP co-chairman Gordon Caplan and former TPG Capital LP executive Bill McGlashan.

The case is US v. Wilson, 22-1138, 1st US Circuit Court of Appeals (Boston).

(Updates with comments by lawyers for defendants, excerpts from court’s ruling)