Whistleblower Lawsuit Exposes Admissions Scandal at Horace Mann School
A lawsuit involving the prestigious New York City prep school Horace Mann was filed in New York Supreme Court. The lawsuit alleges that Qi Tom Chen, president of the software firm Lake 5 Media, engaged in a pay-to-play scheme by pledging $1 million to the school in exchange for preferential admissions treatment for his children. The lawsuit, filed by former Lake 5 Media assistant Daniel Hayward, also accuses Chen of tax fraud, claiming that the admissions payments should have been reported as taxable income rather than tax-deductible charitable donations.
The lawsuit details how Chen hired a private school admissions consultant in 2018 to arrange a meeting with Horace Mann's headmaster, during which the alleged deal was made. Hayward further accuses Chen of falsely reporting $500,000 in "rent" payments to a company called CTBS Everblue LLC, which were actually used to purchase wine and art lessons for his children.
Eric Rosen, a former federal prosecutor involved in the "Varsity Blues" college admissions scandal, commented that the legality of the allegations depends on how explicit the deal was between Chen and the school. Simply hinting at or hoping for a favor in return for a donation is not illegal.
Horace Mann, known for its high tuition costs of nearly $60,000 annually and a low acceptance rate of 10% for kindergarteners, has denied any quid pro quo for donations. The school's spokesman, Ed Adler, stated that there has never been such an arrangement for gifts at the school. The lawsuit, initially filed in 2020, was unsealed in May, and if Hayward's claims are proven, he could receive a portion of any back taxes paid to the state.
