THREE SEATTLE AREA WOMEN SENTENCED FOR BANK FRAUD SCHEME IN “OPERATION HONOR ROLE”
Defendants Stole Identities to Apply for More than $2 Million in Student Loans
Three members of a Renton, Washington, family, were sentenced this morning in U. S. District Court in Seattle in connection with a bank fraud scheme that abused student loan programs. The leader of the scheme, LESLIE Y. GORDON, 36, of Renton, Washington, was sentenced to five years in prison, five years of supervised release and more than $580,000 in restitution. GORDON’s sister, THERESA R. HARDY, 21, was sentenced to 21 months in prison and five years of supervised release. The women’s mother, KATHY L. HARDY, 60, was sentenced to a year of home detention and five years of supervised release. At sentencing U.S. District Judge John C. Coughenour said, “these were student loan funds for a very precious, almost sacred purpose.”
Members of the theft ring were arrested June 8, 2008, after being indicted for Bank Fraud and Aggravated Identity Theft. The women used other people’s Social Security numbers and identification information to apply for $2,234,000 in student loans. The banks were defrauded of more than $722,000. The investigation revealed that the Social Security numbers were stolen from a medical clinic where KATHY L. HARDY worked. Judge Coughenour ordered HARDY to serve her sentence with home confinement to care for her daughters’ young children, some of whom have special needs.
The women pleaded guilty in May 2009. In her plea agreement, GORDON admitted that she was the organizer of the bank fraud scheme to use stolen identities to obtain student loan proceeds. KATHY HARDY admitted she provided the stolen identities from the medical office where she worked to facilitate the fraud. THERESA HARDY admitted she allowed her name and bank account to be used to negotiate the checks issued by the banks. The scheme began in April 2005, and over the next three years various members of the conspiracy allegedly submitted a dozen different student loan applications using other people’s names, and/ or Social Security numbers as the borrower or the cosigner. The conspirators defaulted on the loans, taking the cash but never making a payment. GORDON used some of the cash to travel to New York, Las Vegas, and even to the 2006 Super Bowl in Phoenix, Arizona. Other members of the ring bought cars and designer clothes and jewelry.
In court Assistant United States Attorney Aravind Swaminathan noted that the victims who had their identities stolen were defenseless, “they went in for medical treatment and had their personal information stolen.” “Regardless of how careful they may have been to protect their personal information by shredding financial documents or simply using a locking mailbox, there was simply nothing these victims could do to prevent (HARDY) from abusing her access to this sensitive information,” prosecutors wrote in their sentencing memo.
The case was investigated by Social Security Administration Office of Inspector General (SSA-OIG), the Federal Bureau of Investigation, the Secret Service, the United States Postal Inspection Service, the Seattle Police Department and the King County Sheriff’s Office. The case was prosecuted by Assistant United States Attorneys Norman Barbosa and Aravind Swaminathan as part of the U.S. Attorney’s Office Working Group on Identity Theft.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.