The Public Records Solution

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Earning a college degree says a couple of things about someone. It shows that the individual can finish what he or she starts; that he or she has met certain, often rigorous, educational requirements; and that he or she values an education. It is also means that someone has a pretty important credential for getting a job. Of course, receiving a college degree is a lot of hard work and can be expensive. Fortunately, for those who are financially strapped and would be otherwise unable to pay for school, the federal government offers a student loan program. High school graduates and equivalents that plan to further their education are eligible to complete the Free Application for Federal Student Aid (FAFSA) form and apply for federal student aid. Today’s Fraud of the Day, courtesy of a Tampa Bay Online article, shows us that this federally funded program is yet another target of fraudsters.

The article reports that a husband and wife duo (part of a family fraud business) decided to rip off the federal student loan program. They were pretty deliberate about it. They created a corporation called Graduate Assistance and Consolidation (GAC) (certainly sounds legit), that helped individuals without a high school diploma or general education equivalent to enroll in a Florida college (not good) and then apply for federal student aid. (And, here’s where the taxpayer gets taken for a ride.You must have a high school diploma or a GED to qualify for federal student aid.)

So, how did it work? The deceptive duo applied for federal student loans on behalf of these ineligible students ”providing false information on the applications.’? They then received ”dozens of financial aid checks for various individuals that were mailed to addresses associated with GAC.’? Sometimes our fraudsters received a percentage (kick back, baby) of the money paid to the ineligible students. Other times, they simply ”endorsed the checks without the individuals’ knowledge, and deposited the money” into their bank accounts. (Why take a percentage, when you can just have it all? This is really Uncle Sam’s money; he won’t miss it anyway, right?)

The financial aid fraudsters got away with $400,000. The husband recently pleaded guilty to charges stemming from this student loan scam. He faces up to 12 years in prison. His wife pled guilty in August and is awaiting sentencing, as well.

Okay, we see the problem. A couple of fraudsters helped some ineligible students apply for college? used fake information to fill out the FAFSA form to apply for federal student loans, had the checks mailed to certain addresses and then took at least a cut of the money – or in some cases all of it. Now, the factors that create the problem also help to create the solution. The key words here are? ”ineligible students,” ”fake information” and ”addresses.’? Government agencies with loan or benefit programs can easily identify potential indicators for fraud by leveraging public records and data analytics technology to examine a population (in this case, the students) against key indicators (e.g., address information, whether the individual is on a list of students accepted to attend a university, etc.).

So, here’s today’s question of the day? shouldn’t an agency choose to leverage public records and data analytics to find fraud before sending out $400,000 in checks to fraudsters? Anyone? Anyone?

Source: Today’s ”Fraud of the Day” is based on an article titled, ”St. Pete Man Faces 12 Years in Prison on Student Loan Fraud Charges,” published by the Tampa Bay Online on October 23, 2012.

A St. Petersburg man faces a maximum penalty of 12 years in prison after pleading guilty to student loan fraud charges on Tuesday.

According to the plea agreement, James Isaac Boyd, 40, and his wife, Shaneva Boyd, formed Graduate Assistance and Consolidations (GAC), a corporation that assisted students who neither had a high school or equivalency diploma to fraudulently enroll at St. Petersburg College.

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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.