Beauty School Owner And Son Sentenced In Manhattan Federal Court For Educational Grant Fraud
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SIU PING YUEN, owner of the USA Beauty School International, Inc. (“USAB”), and DOMINICK YUEN BONOMOLO, the Financial Aid Administrator of USAB and YUEN’S son, were sentenced today to 18 months and one year and one day, respectively, for their solicitation and receipt of over three million dollars of fraudulent federal financial aid from the Pell Grant Program between 2006 and 2010. On June 28, 2012, a jury found YUEN and BONOMOLO guilty on all three counts after a one-week trial before U.S. District Judge Loretta A. Preska.
Manhattan U.S. Attorney Preet Bharara said: "Siu Ping Yuen and her son and co-conspirator, Dominick Yuen Bonomolo, exploited a federally-funded program designed to assist low-income students achieve educational success. Schemes like these are all too familiar and will not be tolerated."
According to the Superseding Indictment filed in Manhattan federal court, other court documents, statements made at trial, and court proceedings:
The Federal Pell Grant Program, administered and funded by the U.S. Department of Education (DOE), provides financial aid to eligible, low-income, post-high school students to assist with post-secondary education costs. The grants are paid by the DOE to the educational institution, which then provides credits to the enrolled student to cover charges, such as tuition. To participate in the Program, institutions must enter into a Program Participation Agreement with the DOE.
USAB, which provides cosmetology courses, is located in the Chinatown section of Manhattan. From July 2006 through December 2010, YUEN, BONOMOLO, and their employees obtained millions of dollars in Pell Grant funds for USAB. Their scheme involved creating fictitious high school diplomas in an effort to make otherwise ineligible students appear qualified to receive grants, making false statements on federal financial aid applications so that USAB could obtain grants to which its students were not entitled, and causing the creation of false attendance records in which students were marked present when, in reality, the students were absent from school. In certain instances, attendance records were created for periods in the future.
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YUEN, 74, and BONOMOLO, 23, of Whitestone, New York, were each found guilty of one count of Pell Grant fraud, one count of conspiracy, and one count of wire fraud.
In addition to the prison term, Judge Preska ordered YUEN to pay $3,299,620 in forfeiture and $3,299,620 in restitution to the DOE, representing funds taken in the course of the fraud. YUEN was also sentenced to three years of supervised release.
In addition to the prison term, BONOMOLO was ordered to pay $1,833,122 in restitution, and to two years of supervised release.
Mr. Bharara praised the investigative efforts of the DOE, Office of the Inspector General, and thanked the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations, for its assistance in the investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Martin S. Bell and Justin Anderson are in charge of the prosecution.