Getting Schooled

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Imagine being a first-time college student – fresh to the ”grown-up” world, grasping the responsibility of cleaning your dorm room, attending classes, paying for your meals and signing fraudulent student-loan forms through the guidance of an expert financial fraudster. Wait a minute…student-loan fraud wasn’t on the list of things to try in college! Unfortunately, that’s what happened to five California students who fell victim to a student-loan fraud scheme, according to a report from The Orange County Register.

The woman targeted her victims through her children. Between August and December 2007, she promised to help at least five of her children’s friends to secure financial aid for college. The students provided their personal information and followed her instructions to sign documents that ”they did not read or understand.’? (First lesson? read what you are signing!? Using the students’ information she successfully applied for and received approximately $262,000 in financial-aid loans. (She is good…my kids can’t get a penny!? Unfortunately for the students, she had no intention of helping them. Instead, she pocketed the cash for herself (the usual…cars, vacations, etc.), as well as used it to pay a previous debt to the state resulting from prior tax fraud charges. (She was taking responsibility for her debts. See…she has become a responsible citizen!)

Now she’s going to prison for seven years. She recently pleaded guilty to 13 felony counts that included grand theft, money laundering, identity theft, and filing a false tax return, as well as sentencing enhancements/allegations for aggravated white collar crime over $100,000. She must also pay $262,000 in restitution, plus $31,000 to the State Franchise Tax Board and $524,000 in fines to the county.

Here, it is safe to say that both parties ”got schooled.’? The fraudster was caught and the students learned a couple of important lessons? 1) know what you are signing and 2) be cautious about sharing your personal information. We’d all do well to keep those same lessons in mind next time we think about signing on the dotted line.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Woman gets 7 years for student loan scheme,” by Vik Jolly, published by The Orange County Register, January 6, 2012.

SANTA ANA – A Laguna Hills woman was sentenced Friday to seven years in prison for bilking at least five students out of $262,000 in a student-loan fraud scheme to pay restitution in another financial crime.

Carla Ann Brennan, 63, also used the money for personal use, the Orange County District Attorney’s Office said.

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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.