RELATED: Amid the College Admissions Scandal, Here Are 8 Organizations Helping Disadvantaged Students

“They were offered the carrot and the stick,” the source tells PEOPLE. “The carrot was that this can all go away and you can serve your time and put it behind you. Remember, they were facing 20 years, even before the latest charges. The stick was that [the prosecution] would and could pile on more serious charges.”

On March 12, the U.S. Attorney’s Office in Massachusetts announced the initial charges against 50 people, including Loughlin.

RELATED: Lori Loughlin Allegedly Paid for Daughters to Pose as Crew Recruits — Even Though Neither Rowed

Loughlin, 54, allegedly gave $500,000 to have her daughters, Olivia Jade and Isabella Rose, designated crew team recruits for USC, even though they had never rowed, the indictment alleges.

RELATED: Amid the College Admissions Scandal, Here Are 8 Organizations Helping Disadvantaged Students

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Prosecutors alleged in the original criminal complaint against the couple that Loughlin paid $500,000 to admissions consultant William “Rick” Singer and his nonprofit organization, Key Worldwide Foundation (“KWF”), which prosecutors said was actually a front for accepting bribes. Singer has since admitted his role as the ringleader of the scam and has pleaded guilty to multiple charges.

As things continue to tighten, Loughlin and Giannulli are now trying to figure out their next move, the source tells PEOPLE.

“They decided to roll the dice,” the source says, “and it may have been a bad gamble. Now they’re in worse shape than before.”

Calls to attorneys for Loughlin, Giannulli and Huffman were not immediately returned.


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