University Of Great Falls Student Sentenced To Six Month In Custody For FAFSA Fraud

GREAT FALLS – Former University of Great Falls student, Brenden James Leischner, 24, now of Indio, California, was sentenced to six months in federal custody for Federal Student Financial Aid Fraud, by U.S. District Judge Brian Morris. The United States Attorney’s Office announced that today’s sentence also included five years’ probation, $82,237 in restitution to the U.S. Department of Education, $2500 in payment for court-appointed counsel to the U.S. District Court, and a $25 special assessment.

At an earlier hearing, federal prosecutors told the Court that Brenden Leischner, son of Mark and Tammy Leischner, who have also plead guilty to multiple felonies involving embezzlement of federal funds, bankruptcy fraud, obstruction of justice and federal student financial aid fraud, applied for admission and was accepted to the University of Great Falls (UGF) in the Fall of 2009 as a Criminal Justice major.  While enrolled at UGF, Leischner and his parents completed multiple Free Application for Federal Student Aid (FAFSA) applications in which they concealed significant income that would have disqualified them for student and parental loans and grants.

On August 29, 2012, Mark Leischner applied for a PLUS Loan (Parent Loan for Undergraduate Student) which was declined the next day due to lack of credit-worthiness.  A week later, on September 8, 2012, Mark Leischner filed an Endorser Addendum for Federal Direct PLUS Loan and listed his son-in-law, as a co-signer for the $17,500 loan.  The son-in-law had sufficient credit worthiness so the loan was approved, obligating the son-in-law to pay the debt.  Brenden’s sister, told law enforcement that Brenden stayed with them for a portion of that summer and had a bedroom downstairs where the family file cabinet was kept and had access to her husband’s social security number.  The son-in-law later filed an identity theft complaint with Yellowstone County for his father-in-law’s use of his name and social security account number to obtain the loan and harm his credit.  The son-in-law had discovered the theft of his identity when he had attempted to get new mortgage financing and had been denied because of the PLUS loan.

This loan was processed through the University of Great Falls.  When the money arrived Brenden went to the Financial Aid office and asked for the entire amount—less what the college retained to pay his bills to them—and they wrote him a check for $13,374 which Brenden took to his bank and converted all but $1000 into cash; of which, according to Brenden, he gave $6000 to Mark Leischner to pay on a past due mortgage payment and other bills, all unassociated with Brenden’s educational expenses.  After becoming aware of the federal student aid fraud investigation, Mark Leischner called the Financial Aid office and said something to the effect of “I think Brenden may have made off with the money from that loan.”  

By 2013, Brenden Leischner was an emancipated adult and filed his own FAFSA—without having to disclose any income or assets but his own, on May 2, 2013, for aid in the 2013-2014 academic year.  He claimed to be married and may have or not had a legally recognizable marriage under common law. There is no evidence that he and his girlfriend were ever married by license or ceremony.  On her FAFSA, his then girlfriend indicated they were married as well.  Independent married students get more federal aid than unmarried students. 

Brenden Leischner failed to disclose that he had received a $105,000 medical malpractice insurance payment two months earlier, in February 2013.  Leischner deposited $50,000 of his medical settlement with the investment company Waddell and Reed and then made withdrawals totaling $16,000 from the investment in the form of checks issued payable to him in April ($3,500), May ($7,500) and June 2013 ($5,000).  After reviewing these check disbursements, Brenden admitted he had cash funds available in May 2013.  Investigation disclosed that after receiving the $105,000, Brenden Leischner bought himself a Hummer and took an extended vacation to Hawaii with his girlfriend. 

Mark and Tammy Leischner, and Brendon Leischner’s uncle, James Eastlick, Jr. are scheduled for sentencing in federal court in March 2015.  Brenden’s grandfather, James Eastlick, Sr., was sentenced to a year in federal prison in September 2014 for his role in the embezzlement of $311,000 of federal funds.  

The case was brought by the federal agents of the Guardians Project and was investigated by the Office of Inspector General of the Department of Interior, with the support of the Internal Revenue Service’s Criminal Investigation Division and the Office of Inspector General for the U.S. Department of Education.