Cedar Rapids Man pleads guilty to student loan fraud
Contact: Peter Deegan
A man who participated with others in a scheme to fraudulently obtain federal student loans pled guilty today in federal court in Cedar Rapids.
Cory Alan Bailey, 21, from Cedar Rapids, was convicted of one count of mail fraud.
In a plea agreement, Bailey admitted participating in a scheme with others to fraudulently obtain federal student loan proceeds. Bailey recruited others to sign up for classes at Kirkwood Community College in Cedar Rapids. Bailey then created e-mail accounts for those he recruited. Bailey and his co-schemers used the e-mail accounts to apply for federal financial aid for the others, enroll them in classes, and arrange for their federal loan proceeds checks to be directed to post office boxes under the control of his co-schemers. Those recruited were not really students attending classes.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Bailey remains free on bond previously set. Bailey faces a possible maximum sentence of 20 years’ imprisonment without the possibility of parole; a fine of up to (a) twice the gross gain resulting from the offense, (b) twice the gross loss resulting from the offense, or (c) $250,000; a mandatory special assessment of $100; and a term of supervised release of up to 3 years.
The case is being prosecuted by Assistant United States Attorney Peter E. Deegan, Jr. and was investigated by the United States Department of Education and the United States Postal Inspection Service.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR10-27.
