Colliding with the Law

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Collisions can be messy. Whether a car accident sets off a chain of events or two people run into each other while carrying their coffee cups, someone has to clean up the aftermath. A story published in The News & Advance tells about what happened when one woman’s plot to scam a student loan program and a few insurance companies collided with the law.

The article reports that the woman and two co-conspirators had several schemes going on at one time. She and her fraud team allegedly submitted insurance claims for car wrecks that never occurred. They also submitted a bogus temporary rental agreement for reimbursement related to a fire and used stolen identities to file Free Applications for Federal Student Aid. (The ringleader received credit refunds in the names of her incarcerated brother, her son and a man she was dating. I bet he won’t be asking her out on another date ever again.) All three received debit cards containing credit refunds related to college level online classes they registered for, but did not intend to take.

The 43-year-old pleaded guilty to one count each of conspiracy to commit mail fraud, wire fraud, aggravated identity theft and student loan fraud. She is facing a minimum of two years in prison for identity theft and a maximum of $1 million in fines. The ringleader also is looking at a maximum of 45 years in prison on the three other charges.

One of the alleged co-conspirators is facing one count of conspiracy to commit mail and wire fraud, plus four counts of student loan fraud. The second alleged co-conspirator is facing eight counts of mail fraud. They are both set to have a jury trial, where the ringleader will serve as a witness. These individuals are merely accused of these crimes; they still are due their day in court.

We don’t know exactly what sentence the ringleader will receive, but colliding with the law is no walk in the park. The government is pretty experienced in cleaning up the acts of criminals and making sure that justice is served.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Lynchburg Woman Convicted of Defrauding Student Loan Program, Insurance Companies,” written by Justin Faulconer and published by The News & Advance on May 19, 2015.

A Lynchburg woman was convicted of several federal fraud charges Tuesday in a scheme to defraud a student loan program and insurance companies.

Melinda Smith, 43, pleaded guilty in U.S. District Court in Lynchburg to one count each of conspiracy to commit mail and wire fraud, wire fraud, aggravated identity theft and student loan fraud. As part of the plea agreement, federal prosecutors dismissed three dozen charges: 22 counts of student loan fraud, eight counts of mail fraud, three counts of wire fraud and three counts of aggravated identity theft.

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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.