Fayetteville Grandmother Gets Five Year Federal Prison Sentence for Stealing Over $5 Million in Community College Scholarship Scam

A federal judge sentenced a Fayetteville grandmother, Cynthia Denise Melvin, age 60, to five years in federal prison for wire fraud stealing over $5 million from federal student aid for community colleges all around North Carolina.  She pleaded guilty on February 26, 2025.  The federal judge also ordered Melvin to pay back $3,641,473 in restitution to the U.S. Department of Education.

“We have seen dishonest thieves stealing taxpayer dollars all over the country, including right here in Eastern North Carolina. In her federal student aid fraud scheme, this grandmother stole the most money ever prosecuted in North Carolina,” said U.S. Attorney W. Ellis Boyle. “We will find and prosecute criminals who steal tax dollars from benefit programs intended to help students who need it to pursue education. She should have been taking care of her grandkids, setting an example of how to be a good person. Instead, now she will spend half a decade in federal prison apart from them.”

“I’m proud of the work of OIG special agents and our law enforcement colleagues for shutting down yet another student aid fraud ring and holding Ms. Melvin accountable for her criminal actions,” said Andrew Balceniuk, Acting Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Eastern Regional Office. “The Office of Inspector General is committed to stopping student aid fraud rings, and we will continue to aggressively pursue anyone who participates in them.”

According to court documents and other information presented in court, between approximately 2016 and 2023, Inmate Melvin organized, led, and conspired with approximately 80 “straw students” to fraudulently apply for federal student aid at multiple community colleges in North Carolina, including Wake Tech, Cape Fear Community College, and Fayetteville Tech.  Federal investigators from the U.S. Department of Education, Office of Inspector General (OIG), estimate that the scheme resulted in over $5 million in financial aid awards and more than $3.5 million disbursed.  This scheme is the largest of its kind ever prosecuted in the State of North Carolina.

Federal Student Aid (FSA), part of the U.S. Department of Education, administers financial aid programs to assist qualified students in their pursuit of college level education.  FSA also develops, distributes, and processes the Free Application for Federal Student Aid (FAFSA).  After a school applies a financial award to a student’s tuition and fees, any remaining balance is refunded to the student for education-related expenses.

According to the investigation, Inmate Melvin collected personal identifying information from straw students and submitted fraudulent applications at the targeted schools. Then, inmate Melvin faked the attendance at classes, completion of work, and interactions with the target schools when, in reality, inmate Melvin impersonated these straw students.  Inmate Melvin submitted FAFSA forms for the straw students through FSA’s website and concealed her identity as the preparer.

During the execution of a federal search warrant at inmate Melvin’s home, OIG investigators recovered evidence establishing the operation and mechanics of the scheme, including personal information and coursework for straw students, FSA account usernames and passwords, and bank account and routing numbers.

United States Attorney for the Eastern District of North Carolina made the announcement after sentencing by Chief Judge Richard E. Myers, II. The U.S. Department of Education, Office of Inspector General, investigated the case. Assistant U.S. Attorney Adam F. Hulbig prosecuted the case.

A copy of this press release is located on our website. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:25-CR-14-M.