Scared Yet?

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11153352 - student loan application form and mini graduation cap

The only things an identity thief needs for obtaining a student loan are your name, birthdate, address and Social Security number. These are the keys to establishing a Federal Student Aid ID and to creating a fraudulent loan account without your knowledge. (By the time you find out about it, it’s too late and the damage is done.) I’m sure that a bunch of individuals in the Danville and Martinsville regions of Virginia weren’t too happy when they discovered that a local man committed student loan fraud using their identities. (He illegally obtained $117,000 in student loan funds.)

 The Danville, Virginia man not only used the stolen identities to apply for financial aid, but also to enroll in online courses, colleges and universities. (I’m sure he never took the classes.) His illegal actions caused the U.S. Department of Education to send grants and lend money to the educational institutions. (This paid for fictitious students’ tuition and living expenses.)

The schools issued debit cards in the names of fictitious students and mailed them to various locations throughout Danville and Martinsville. As you might guess, the fraudster from Southern Virginia collected them all, using the debit cards for a shopping spree or two. (I’m sure his purchases did not include books, papers, or highlighters.)

The 29-year old Danville, Virginia man pleaded guilty to one count of student loan fraud and two counts of aggravated identity theft. He was sentenced to five years and one month in prison and ordered to pay $117,000 in restitution for his crime against the federal government and his victims.

Having your identity stolen and used to take out a student loan can wreck your finances. It will affect your credit score, especially if the identity thief does not make any payments on the loan you didn’t know about. (You can bet they are not going to pay much, if anything, back to the lender.) Then, if you don’t pay back the loan you didn’t know you had, you could be sued by the lender and your wages could be garnished. (If you’re not scared yet, you should be.)

 So, what can you do to protect your identity from being used to fraudulently obtain student loans? First and foremost, monitor your credit report for any unauthorized actions. Second, be careful with whom you share your personally identifiable information. And, third, you can always put a freeze on your credit report so you receive an alert if anyone tries to use your name. (Just remember to remove the freeze when you’re trying to take out a loan.)

Today’s “Fraud of the Day” is based on an article entitled, Danville man sentenced to 61 months in prison for student loan fraud,” published on WDBJ7.com on January 10, 2017.

DANVILLE, Va. (WDBJ7) – A Danville man, who obtained the identities of individuals in the Danville and Martinsville regions in order to apply for fraudulent student loans in their names to steal money from lenders, was sentenced Tuesday in the U.S. District Court in Danville for multiple federal charges, according to U.S. Attorney Rick Mountcastle.

According to a release from the U.S. Attorney’s Office of the Western District of Virginia, James Willie Waller Jr., 29, was sentenced Tuesday to 61 months in prison and ordered to pay $117,000 in restitution. Waller previously pleaded guilty to one count of student loan fraud, one count of wire fraud and two 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.