While better known for resulting in the arrests of two Hollywood stars, the nationwide scandal involving wealthy parents bribing college admissions officials so their children could be accepted into elite schools has caught a prominent biotech investor in its dragnet.

Manuel Henriquez, CEO and founder of Palo Alto, California-based hedge fund and venture capital investment firm Hercules Capital, was arrested in New York Wednesday and released on $500,000 bail following an appearance in federal court. In a statement, Hercules said Henriquez had voluntarily stepped aside as chairman and CEO, with lead independent director Robert Badavas stepping in to replace him as interim chairman and Scott Bluestein, the chief investment officer, appointed interim CEO.

Henriquez and his wife, Elizabeth, turned themselves in on charges of conspiracy to commit mail fraud and honest services mail fraud, according to federal prosecutors. They are due to appear in federal court in Boston on March 29. They are among 50 people in eight states facing charges in the scheme, including actresses Felicity Huffman and Lori Loughlin. Federal prosecutors allege that those charged facilitated cheating on college exams and false athletic recruitment of students to elite schools such as Yale University, Stanford University, Georgetown University, Wake Forest University and the University of Southern California. The alleged mastermind was Newport Beach, California, businessman William Singer.

Hercules’s highly diversified portfolio includes a strong presence in healthcare and life sciences, with investments across 128 companies including life sciences, healthcare services and drug-development technology. Its biopharma portfolio of more than 50 companies includes a number of prominent firms, One is Audentes Therapeutics, a gene therapy company focused on hearing disorders. Another is Acceleron Pharma, which has partnered with Celgene to develop its lead product, luspatercept, for blood disorders like beta-thalassemia and myelodysplastic syndrome, which investors consider likely to win regulatory approval in the US.

One of Hercules’s more recently investments was its participation in a $299.2 million funding round for Palo Alto-based BridgeBio, which finds genetically targeted drugs discovered in academia and then creates subsidiary companies to develop them.

Photo: Alex_str, Getty Images

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