COMMUNITY PRESS NORTHEAST ❚ WEDNESDAY, MAY 22, 2019 ❚ 7A
How a Cincy-area investment fi rm is tied to college admissions scandal Kate Murphy Cincinnati Enquirer USA TODAY NETWORK
A suburban Cincinnati investment fi rm is linked to the nationwide college admissions cheating scandal, the sweeping investigation that revealed how wealthy parents were paying to get their kids into elite schools. Hauser Private Equity, headquartered in the penthouse of the Tower at the Kenwood Collection, was listed as one of William “Rick” Singer’s assets in the sham charity that Singer used to hide the bribery money from those parents. Federal prosecutors are seeking to seize Singer’s investment in Hauser, although court documents give no details on exactly Hauser what the investment is or its size. Hauser Private Equity founders and managing partners Mark Hauser, 58, and Paul Swanson, 58, could not be reached for comment after multiple calls to their offi ces and homes. Singer, the college consultant and admitted mastermind behind the scam, concealed the “nature and source of the bribe payments by funneling payments through the KWF charitable account,” federal court documents say. The parents’ payments were disguised as donations to the nonprofi t Key Worldwide Foundation (KWF) controlled by Singer’s associates. Singer would then use those “charitable donations” to bribe college coaches, school offi cials and ACT and SAT test administrators to pad students’ admissions profi les with fabricated athletic careers and falsifi ed test scores. In addition to concealing the money through the founda-
tion, parents were able to claim tax deductions. So far, 33 parents have been accused of paying from tens of thousands of dollars up to as much as $6.5 million dollars to get their kids into such exclusive schools as the University of Southern California, Yale, Stanford and Georgetown. Actresses Felicity Huff man and Lori Loughlin are among those charged and prosecutors say more arrests are coming. More than a dozen parents have pleaded guilty, as has Singer. In his plea, Singer agreed to forfeit all assets owned or controlled by the Key Worldwide Foundation.
How is local fi rm tied to scandal? One of the assets is the foundation’s “interest in Cincinnati-based Hauser Private Equity Investment,” according to federal court documents. The documents give no further details. The foundation’s tax return or Form 990 for 2016, the most recent available, doesn’t list individual investments. But it does note the foundation had $788,672 in “closely-held equity interests.” Other companies listed among the foundation’s assets in Singer’s plea agreements are Sharky’s restaurant chain (a group of Mexican food grills on the West Coast), Swansea Football Club, Bluestone Partnership, Jamtown, Whamtech Inc. and Virtual PhD. He also must make a forfeiture judgment payment of $3.4 million. Hauser and Swanson were not among those charged in the scheme. Five of the parents charged in the admissions scandal are current or former executives at private equity or investment fi rms.
Hauser Private Equity operates out of the Tower at The Kenwood Collection in Sycamore Township. THE ENQUIRER/JEANNE HOUCK
The federal court documents don’t describe the relationship between Hauser Private Equiity and the foundation, but the elite investment fi rm caters to high net-worth clients. The fi rm was founded in 2008 and has offi ces in Kenwood, Los Angeles, Chicago, and Washington, D.C. According to the fi rm’s website, Mark Hauser lives in Bel-Air and works in Los Angeles, where the majority of those charged in the scheme are, as well as in Cincinnati. On the company’s website, Hauser says, “We’re a hybrid private equity fund, and believe we have the single best investment strategy in the country because of that.” Like a mutual fund or a hedge fund, private equity fi rms collect cash from investors then reinvest the pooled money into specialized portfolios. But private equity investments also
are typically a long-term, high-stakes game, with some investments not paying out for 10 years or longer. And often, while the investment is in play, the money is stuck and can’t be withdrawn. Hauser Private Equity takes in direct investments and investments through funds. It has fl oated at least two funds since 2013, according to documents fi led with the U.S. Securities and Exchange Commission. One required a minimum $250,000 investment, the other required a minimum $1 million investment. The 2017 fund was one of the biggest equity funds ever raised in Cincinnati at $150 million. In addition to running his private equity fi rm, Hauser is also the chairman of Hauser Insurance Group, a national insurance and employee benefi ts broker that’s also based in the same Kenwood offi ce. He’s been with the company since 1986. Hauser has hosted political fundraisers at his home in Indian Hill as recently as March. In 2006, he hosted thenpresident George W. Bush at the house. Hauser gave $12,500 to the 2018 campaign of Ohio Gov. Mike DeWine, along with $10,000 to the campaign of Ohio House Speaker Larry Householder, RGlenford, and $2,500 to Keith Faber’s campaign for Ohio auditor, state records on fi le at Followthemoney.org show. Hauser is a Cincinnati native who attended St. Xavier High School and Miami University. His wife, Margie Hauser, who grew up in Cincinnati and went to Ursuline Academy, is a songwriter and composer. Margie Hauser’s success brought her and the family out to L.A., where she’s continued to grow her career as a songwriter and producer working with artists including Nick Lachey and Alyson Stoner.
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