21 charged with student aid fraud

Sept. 18, 2012 at 7:51 PM
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SACRAMENTO, Sept. 18 (UPI) -- The federal government said Tuesday 21 people have been indicted for their part in student aid fraud schemes at 17 schools in California.

U.S. Attorney Benjamin B. Wagner and U.S. Education Department Inspector General Kathleen Tighe said 17 defendants were charged in six cases brought in the past 35 days and four others were charged in a seventh case earlier this year.

The 17 most recent defendants are alleged to have obtained more than $770,000 through fraud, the U.S. Justice Department said in a release.

"Those who rip off federal aid funds can expect to find themselves in a prison cell instead of a classroom," Wagner said.

Tighe added federal student aid is made available to help people "make their dream of a higher education a reality, not for criminals to use as a personal slush fund."

The federal authorities said several of the alleged fraud schemes involved applications to participate in online educational programs.

They said the fraud rings mainly target lower-cost institutions because the federal student aid awards often satisfy institutional charges, such as tuition, with the balance going toward other educational expenses, such as books, room and board, and commuting.

It was that award balance the alleged fraudsters went after, prosecutors said.

The schemes involved people who had no intention of pursuing a degree or credential, and often did not have a high school diploma or GED so they would not have been eligible for federal student aid.

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