Exclusive NYC Prep School Accused Of Admission Scandal
New York City prep school, Horace Mann, is at the center of a scandal involving a wealthy tech honcho and accusations of a pay-to-play scheme. In a shocking lawsuit that has rocked the integrity of the prestigious school, a wealthy tech executive Qi Tom Chen stands accused of buying admission for his children at the school.
— New York Post (@nypost) June 16, 2023
The lawsuit, filed in the New York Supreme Court by Daniel Hayward, a former assistant at Lake 5 Media, claims that Qi Tom Chen, the president of software firm Lake 5 Media, paid the sum of $1 million to ensure his children received preferential treatment in the school’s admissions process.
According to the lawsuit filed in the New York Supreme Court, Chen engaged the services of a private school admissions consultant who facilitated a meeting with Horace Mann’s headmaster in 2018. It was during this meeting that the alleged deal was struck, with Chen making the million-dollar pledge in exchange for special considerations for his children.
The admissions controversy is part of multiple allegations brought against Chen as it also accuses the tech honcho of tax fraud.
The lawsuit further claims that Chen engaged in tax evasion by failing to report the admissions placement payments as taxable “unrelated business income” to the IRS and instead chose to exploit a loophole in the system.
“Parents such as Mr. Chen generally claim their admissions bribes as tax deductible charitable donations,” the suit revealed, adding that Horace Mann, too, does not acknowledge these funds as “unrelated business income,” despite their lack of contribution to the school’s educational mission, but rather treats them as fundraising revenue.
The allegations against Horace Mann stand out as the school, with its annual tuition cost of nearly $60,000, has earned a reputation as an elite institution. With an acceptance rate of only 10 percent for kindergarteners, ambitious parents seeking to secure the best education for their children highly covet the school which sells a promise of “academic excellence.”
While the allegations tint the school’s image, it is unclear if the school outrightly broke any laws yet, according to former federal prosecutor Eric Rosen. Rosen, who was involved in the “Varsity Blues” college admission scandal cases, explains that the outcome of the allegations against Horace Mann will largely depend on the explicit nature of the alleged deal.
Merely hinting at or hoping for a favor in return for a donation does not exactly constitute illegal activity, according to Rosen.
Nevertheless, Horace Mann has denied any involvement in a quid pro quo arrangement, arguing that it has become collateral damage in a dispute between others. “The matter doesn’t involve Horace Mann, and there has never been a quid pro quo for gifts at the school,” a spokesperson for the school, Ed Adler, stated.