Ex-inmate Sentenced for Student Loan Fraud

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According to the KSDK.com article, Michelle Owens—an ex-inmate from the South Carolina Correctional Institution—used her prison job in the educational office to gather other inmates’ personal information. She then used that information to apply to be a student at Webster University, where she was accepted under 23 different identities and applied for federal student aid. She received FAFSA approval for loans and $124,821 in federal taxpayer dollars, which—shockingly enough—she did not spend on an education for any of her identities! FAFSA needs to do a better job of verifying identities and checking eligibility.

These fraudulent accounts could easily have been detected by the fact that she was using addresses that she controlled and not actual past addresses of the inmates. How easy? Basic background should bring up residential history and the accounts should identify the individuals as incarcerated.

SAT QUESTION OF THE DAY: Why weren’t there controls on her access to the academic records for 23 people?

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Michelle Owens sentenced for student aid fraud involving Webster University,” published by KSDK.com, September 30, 2011.

A 35- year- old Florence, South Carolina woman was sentenced on federal student aid fraud after sending falsified Webster University applications and Department of Education financial aid forms, the United States Attorney’s office said.

Michelle N. Owens was incarcerated in a Leath, South Carolina Correctional Institution from December 2007 to September 2008, where she worked in the education department and had access to the other inmate’s personal information. After being released, she used 23 different inmates’ names to apply to the Webster University’s distance learning program and to request student loans and federal tax dollars equaling up to $467,500.

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