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Adventures in the American meritocracy

On April 5, 2019

At 8:11 am

In General

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See if you can guess where this is going:

It was a modest house by this town’s standards, a center-entrance colonial, three bedrooms and a two-car garage on a quarter-acre lot. The inside hadn’t welcomed a renovator in many, many years, and the outside didn’t wear its age particularly well.
Its owner: Peter Brand, Harvard University’s legendary fencing coach. Its assessed value: $549,300.
So when the house sold to a wealthy Maryland businessman for close to a million dollars in May 2016, the town’s top assessor was so dumbfounded that he wrote the following in his notes: “Makes no sense.”

If you guessed “using real estate to launder money for fun and profit,” aka the Donald Trump Special, you’re right:

The buyer, it turns out, was the father of a high school junior who was actively looking at applying to Harvard with an eye toward being on the fencing team.

Soon enough, Jie Zhao’s younger son would gain admission and join the team. And Zhao, who never lived a day in the Needham house, would sell it 17 months after he bought it for a $324,500 loss.

The details of this particular slice of grifting a la mode are particularly delicious.

Per the Boston Globe, Jie Zhao’s kid had almost perfect grades at St. Grottlesex along with stratospheric test scores, plus he was playing a rich white person sport that can provide a semi-back door entrance to schools like Harvard, plus the kid’s mom has “multiple Harvard graduate degrees,” plus his older brother was already a “student-athlete” at Harvard (on the fencing team naturally, which of course there’s a story about that too).

But hey you can never be sure, especially these days, so let’s bribe the fencing coach, a downtrodden schmuck making just $225K per year — this is admittedly a guess — who then immediately turns around and buys a condo in Cambridge that was listed for $989,000 but for which Brand paid $1.3 million, 800K of which was in cash (The story doesn’t note that the condo was listed for exactly the same price that Zhao paid for Brand’s house, which probably explains where Brand came up with the number. Indeed I can picture Brand and his wife engaging in a little Zillow porn, staring wistfully at the glossy photos of the fabulous condo, and then one of them coming up with a bright idea).

My favorite detail in this little saga are how these guys got caught: 17 months after the sale, Zhao decides to dump the property, which he never even rented., and lists it with an agent. A couple of flippers come along, look at it, check out the previous sale price and the previous owner of record, and joke among themselves that I guess somebody was trying to get his kid onto the Harvard fencing team. Then a few weeks later the Varsity Blues scandal breaks. So they decide to call a Globe reporter.

How much stuff like this goes completely undetected? My guess would be, “a lot.”

(There’s also a story line about Zhao donating a million dollars to a fencing non-profit which turned around and gave Brand’s and his wife’s non-profit a $100K grant at around the time Zhao’s older son got into Harvard via the fencing team. Check out the Globe piece for details).

ETA: Naturally Harvard is shocked and outraged that one of the guys in the count room is skimming the skim.

Reminder: Bribing the institution = good/bribing a low-level employee = bad.