Report Card: ‘F’ for Fraud

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39588853 - graduation cap with financial aid text on assorted hundred dollar bills

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For many, student loans mean the difference between going to college and not going. Not so for this ”Fraud of the Day” example, found in a story in the St. Louis Post-Dispatch

The article tells of a student employee who exploited her position in her university’s financial aid department to embezzle more than $80,000. (Worse still, she didn’t even spend the money on education.)

According to the story, the woman admitted in her plea arrangement that she processed student loan applications for herself and her husband, even though it was against the rules for employees to handle their own application forms. (I doubt she listed fraud as her major.) The embezzlement charge stemmed from her admission to inflating the cost of attendance, then using the money to pay off credit cards and make home repairs. Over the course of two years, she stole an estimated $82,571. (Class dismissed.)

After the former financial aid office employee pleaded guilty to two counts of embezzlement, she was sentenced to five years of probation and ordered to repay the money that she stole. (Let’s hope this lesson sticks.)

Taking on student loan debt to pay for higher education may be the right course, as long as you don’t cheat on the tests that come along.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Woman ordered to repay $82,000 embezzled from Webster University,” written by Robert Patrick and published by the St. Louis Post-Dispatch on December 4, 2015.

ST. LOUIS • A former employee of Webster University was sentenced to five years of probation Friday and ordered to repay $82,571 that she stole through student loan fraud.

Catherine Nolde worked in the financial aid department.

Although employees were prohibited to process their own applications, Nolde admitted handling applications for herself and her husband, and inflating the ”cost of attendance” on those applications, her plea says. Nolde used the money, an estimated $82,571 from February 2008 to September 2010, for credit card expenses and home repairs, the plea says.

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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.