News and Press Releases

Woman Sentenced to Almost Five Years in Federal Prison for Student Loan Fraud

FOR IMMEDIATE RELEASE
February 24, 2006

Las Vegas, Nev. - A woman charged in June 2004 along with her four children and three grandchildren with defrauding the U.S. Department of Education of almost $1 million in student loans and grants by using dozens of fraudulent identifications, was sentenced today in U.S. District Court to almost five years in prison, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

ANN ARMSTRONG, age 63, of Las Vegas, Nevada, was sentenced by U.S. District Judge Lloyd D. George to 57 months in prison, 3 years of supervised release, and ordered to pay $662,081 in restitution. She pleaded guilty on October 19, 2005, to one count of conspiracy to commit student loan fraud and one count of student loan fraud.

"The government will continue to aggressively pursue cases of student loan fraud,"said U.S. Attorney Bogden. "When individuals fraudulently and illegally receive federal student aid grants and loans, less money is available for deserving students. In this case, Ann Armstrong and her family engaged in an extensive fraud involving institutions in several states, dozens of purported students and almost $1 million in federal student loans and grants."

ANN ARMSTRONG admitted in her guilty plea memorandum that she conspired with her children, Yasmin Armstrong, Anthony Armstrong, Michelle Armstrong, and Royale Armstrong, and grandchildren Michael Armstrong, Jason Jones and Justin Jones, to commit financial aid fraud. The object of the conspiracy was to fraudulently obtain federal student financial aid (grants and loans) through the use of false applications which were submitted by fax and e-mail. Financial aid checks were received through the mail and the funds obtained through the use of false identification documents. Many of the students were unaware that their names were being used to obtain the financial aid.

Using this scheme, the defendants fraudulently obtained almost $1 million in federal student loans and grants. The actual loss to the Department of Education from the fraudulent scheme is estimated at more than $600,000.

ANN ARMSTRONG received an enhanced sentence because she was a leader or organizer of the fraud and it involved five or more participants or was otherwise extensive. She prepared the financial aid applications and directed the activities of the other defendants. She also received most of the proceeds of the fraud and determined how much of the proceeds would be dispersed to the other defendants.

Four of the other seven Armstrong family members charged in this case, Royale Armstrong, Michelle Armstrong, Anthony Armstrong and Yasmin Armstrong, pleaded guilty to conspiracy to commit student loan fraud and were sentenced to prison terms. Another family member, Michael Armstrong, also pleaded guilty to conspiracy to commit student loan fraud and is scheduled for sentencing on March 24, 2006, and faces up to five years in prison. Justin Jones pleaded guilty to misdemeanor student loan theft and was sentenced to five years of probation.

Jason Jones is presently in prison on unrelated state charges and has not yet appeared in this case. The fraudulent scheme was initially reported to the U.S. Department of Education Office of Inspector General by a financial aid officer at Truckee Meadows Community College in Reno.

The financial aid officer observed that a number of students were applying for financial aid using the same addresses and telephone numbers. An investigation was initiated, ultimately leading to the filing of a criminal complaint and issuance of arrest warrants against the defendants.

"Special Agents aggressively pursue those who seek to enrich themselves at the expense of our nation's students," said Department of Education Inspector General John P. Higgins, Jr. "We continue to work with others in law enforcement to prevent identity theft and to safeguard federal education dollars."

This case is being investigated by Special Agents with the Department of Education Office of the Inspector General, and is being prosecuted by Assistant United States Attorney Russell E. Marsh.

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