Criminal Charges Filed Against Four Separate Student Aid Fraud Rings
Criminal charges have been filed against eleven individuals for their roles in four Michigan-based federal student-loan fraud schemes totaling more than $1 million, announced Inspector General Kathleen Tighe of the U.S. Department of Education and Barbara McQuade, U.S. Attorney for the Eastern District of Michigan.
These criminal prosecutions are aimed at shutting down federal student aid fraud rings, loosely affiliated groups seeking to exploit distance education programs to fraudulently obtain Federal student aid.
Today’s announcement highlights four fraud rings operating independently of one another between 2006 and 2010. The eleven individuals charged orchestrated the fraud rings. One ringleader is alleged to have recruited more than 40 people to apply as students for enrollment and aid, even though most had neither a high school diploma nor a GED and were therefore ineligible to receive federal student aid. As a result, participants received more than $665,604.00 in federal student aid. Meanwhile, two of the same ringleader’s brothers orchestrated a similar scheme.
“I’m proud of the work of our agents in our Chicago and Ann Arbor offices and our colleagues in the U.S. Attorney’s Office in Detroit in pursuing those who would abuse the trust of America’s taxpayers by stealing federal student aid. Student aid is not a slush fund for criminals; it provides an opportunity for honest, hard-working students who wish to make their dream of a higher education a reality,” said Inspector General Tighe. “My office is committed to fighting student financial aid fraud and we will continue to aggressively pursue those who cheat these vital aid programs."
“Taxpayers fund federal financial assistance programs to permit needy students to obtain a higher education,” McQuade said. “Stealing these funds robs students of educational opportunities and cheats members of the public from their investment in an educated population.”
Since 2010, the Department of Education, Office of Inspector General has highlighted the vulnerability of distance education programs to fraud and abuse. All aspects of distance education-admission, student financial aid, and course instruction-take place through the internet, and students are not required to present themselves in person at any point. Institutions offering distance education, like all institutions that participate in the federal student aid programs, are not required to verify prospective and enrolled students' identities, so fraud ringleaders are able to use the identities of others, with or without their consent, to target distance education programs. Never needing to set foot on campus, fraud ring participants can exploit institutions well outside their immediate geographic area.
The rings target mainly lower-cost institutions because federal student aid awards easily cover tuition resulting in a higher award balance (known as a refund) paid to the student and intended for educational expenses such as books and room and board. It is these financial aid refund awards which the fraud ring participants seek. The student applicants have no intention of pursuing a degree, and often are not even eligible for federal student aid because they do not have a legitimate high school diploma or GED. The participants take a cut of the financial aid refund proceeds and the turn the remainder over to the ringleaders.
Those charged include: Nina Cooks, 50, Detroit; Sandra Roberts, 40, Detroit; Jacquelyn Robinson, 60, Detroit; Luther Hampton, 55, Eastpointe; Ulysses Hampton, 49, Westland; Ulysses Hampton, Jr., 23, Detroit; Brian Hickman, 45, Detroit; Jason Watkins, 28, Clinton Township; Candace Cureton 61, Detroit; Malayka Burks, 35, Detroit; and Shirley Jimerson, 47, Detroit.
These actions are a result of criminal investigations conducted by the U.S. Department of Education, Office of Inspector General in Chicago, IL and Ann Arbor, MI, the Social Security Administration, Office of Inspector General, the U.S. Postal Inspection Service and prosecutions by Assistant U.S. Attorneys in the U.S. Attorney’s Office for the Eastern District of Michigan.