1st look at Lori Loughlin's defense strategy in college scandal

Loughlin and her husband, Mossimo Giannulli, reportedly plan to argue they didn't know their actions to get their daughters into USC were illegal, a source told People magazine.
4:44 | 04/25/19

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Transcript for 1st look at Lori Loughlin's defense strategy in college scandal
Right now the latest on the college admissions scandal. This morning a first look at Lori Loughlin's defense strategy. Reports she and her husband are planning to argue they didn't know the activity was illegal. ABC's whit Johnson with the details. Reporter: Good morning to you. Facing possible prison time, Lori Loughlin and her husband refused to take a plea deal like other defendants including actress felicity Huffman. Multiple reports now suggesting the couple will fight back arguing they didn't know they were allegedly breaking the law. This morning, new reports hinting to a possible defense for actress Lori Loughlin and her fashion designer husband mossimo giannulli pleading not guilty to charges of fraud and conspiracy in that college admissions scandal. A source close to the couple tells "People" magazine they just didn't realize that what they were doing was illegal adding they gave money to this consultant not entirely knowing everything that was going to be done. You've worked very hard for your success. You should be proud of yourself. Reporter: Allegedly funneling nearly half a million dollars to the scheme's mastermind Rick singer in order to get her daughters into usc as bogus recruits to the crew team. The two apparently agreed to hide their story from the irs if they happened to call. Singer saying nothing has been said about the girls, your donations helping the girls get into usc to do crew even though they didn't do crew so nothing like that has been ever mentioned. Loughlin eventually responded so we just have to say we made a donation to your foundation and that's it, end of story. Singer, that is correct. I don't care about school as you guys all know. Reporter: Loughlin's daughter Olivia jade got into the school as an athlete despite never participating. Just this week Laura Janke accused of working to create fake athletic profiles for students including Olivia jade agreed to plead guilty. The case highlighting examples of wealth and privilege in America. Martha Stewart who once served prison time for lying to federal authorities weighing in to "Entertainment tonight." I feel sorry for them. Reporter: That mistake putting Loughlin and her husband in serious legal jeopardy. Following the scandal this week usc just announced sweeping changes to its admissions process including reviewing athletic candidates on three different levels and auditing athletic rosters. Whit, thanks very much. We have Dan Abrams here right now. We all hear from when we're young ignorance is no defense but in this case it may be? Well, look, you can't say I didn't know the details of the wire fraud law and therefore that's the defense. But you can say as anyone would in this kind of case, I didn't know -- I didn't intend to do I wasn't intending to misrepresent or to defraud, et cetera. And intent is a requirement. Meaning prosecutors will have to show that they -- in essence knew what they were doing and they were doing it on purpose. The facts may get in the way. Her husband sent those rowing photos and money directly to the athletic director. First of all we need to treat them as two separate defendants. Everyone wants to lump them in together and say the couple this and the couple that. They're going to be tried -- they're going to each have their own attorney and will each have their own defenses and one may be different than the other. She may say I didn't know he was doing it, et cetera. And the second piece of this is that they're still going to have to show that they knew what they were doing meaning I think the defense is going to be it sounds like, yes, I was sending in money, I didn't know exactly what it was for. It's not a strong defense for him. But I think that we're getting to a point where everyone is so angry at them and these other defendants that we're losing sight of the real legal defenses that would apply to anyone in this situation because they have had the book thrown at them as a legal matter. Which is why it's still hard to imagine a deal? Well, look, it sounds like a deal would require prison time and it sounds like it would be between a year and two years and as a result I wouldn't be surprised if they say, you know what, let's roll the dice because even if we're convicted, we don't think a judge is going to give them ten years and so the worst case scenario you don't know what it's going to be, maybe would be five years. It's a big difference but you know what, but the reality is I can see why at least she may say, I don't want to cut a deal. Doesn't mean it won't happen but it's not crazy. People are treating it like the defense is crazy and crazy she's not pleading. None of it is crazy. Thanks very much. A powerful message of

This transcript has been automatically generated and may not be 100% accurate.

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