A Circus of Ring Leaders

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Signing up for college classes can be a tedious process. The stress of picking the right classes, the right times and the right teachers may seem like a lot to juggle for some students. For a couple fraudulent ring leaders in South Carolina, signing up for classes was easy, as was stealing money in the form of student loans. Today’s Fraud of the Day from the San Francisco Chronicle, brings to light the scheme that got ”schooled.”

While many people are still paying off their debt from college loans, anticipating the day when those payments disappear, there are a couple fraudsters in South Carolina likely wishing they had never seen a federal student aid application. The article reported that investigators recently found a South Carolina native to be a head ring leader in a scam that swiped over half of a million dollars from the federal government in the form of student loans. (Wow, I wonder what college she was planning to attend?? Prosecutors revealed the ring leader, along with a dozen family members, friends and coworkers applied for online classes and received financial aid, with no intention of taking the courses. Investigations proved that all participants received a small cut of the ”proceeds.”

A judge ordered the woman to serve 27 months in prison. Investigations also revealed a cohort in the scheme, assisting as a second ring leader in the student loan fraud-athon. A judge ordered the second fraudster to serve five years of probation. (What about the money?? Shouldn’t they repay it?? Many of the individuals participating in the fraud ring were found to be employees of a correctional facility. Prior to sentencing, both individuals pleaded guilty to committing mail fraud, wire fraud and student financial aid fraud.

This fraud ring resembles a circus ring – slightly out of control, not knowing what should happen next. But just like every circus comes to an end, so must an illegal fraud. With the close of the circus curtains, we condemn these ring leaders to a while behind bars – or at least probation. Pack up the elephants, pay off the bearded lady – this show is over.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”2 Sentenced in $680,000 Student Loan Fraud Case,” published by the San Francisco Chronicle on September 21, 2012.

CHARLESTON, S.C. (AP) — A Walterboro woman has been sentenced to more than two years in prison for being the mastermind of a scheme that took $680,000 in student loans.

Federal prosecutors said 48-year-old Lena Gant got about a dozen friends, family members and co-workers to apply for online college classes and get financial aid with no intention of taking the courses.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.