Agrees to 60-Month Prison Term
NEWARK, N.J. – A Harrisburg, Pennsylvania, man today admitted his role in a conspiracy that fraudulently obtained more than $24 million from the Post 9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, U.S. Attorney Craig Carpenito announced.
David Alvey, 51, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud.
“Alvey and his codefendants stole money that was intended to provide educational opportunities to the armed services members who served following the attacks on 9/11,” U.S. Attorney Carpenito said. “Their scam targeted unwitting veterans, enrolling them in unapproved online courses without their knowledge. Our office will always work together with our law enforcement partners to find and stop this kind of government fraud, especially when it seeks to victimize those who serve our country with such courage.”
“The VA’s Post-9/11 GI Bill is a comprehensive educational program meant to help our nation’s veterans advance their education and careers as they move from military service to civilian life. Defrauding this important VA program costs our nation’s taxpayers and VA and does a tremendous disservice to our veterans,” Sean Smith, Special Agent in Charge, Northeast Field Office, U.S. Department of Veterans, Office of Inspector General, said. “VA OIG is committed to working closely with our fellow law enforcement partners and thanks the U.S. Attorney’s Office, District of New Jersey, for its dedication to this time-intensive, complex case.”
According to documents filed in this case and statements made in court:
The Post-9/11 GI Bill provides educational assistance to eligible veterans of the U.S. Armed Forces by paying for veterans’ tuition, housing costs, and other educational expenses as long as their courses meet certain criteria. Because these tuition benefits are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order to assess the courses for approval.
From 2009 through August 2013, Alvey – founder and president of Ed4Mil – Lisa DiBisceglie and Helen Sechrist, both of whom previously pleaded guilty to a similar wire fraud conspiracy count, and others, conspired to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits under the Post-9/11 GI Bill.
DiBisceglie, then an associate dean at Caldwell University, helped Alvey get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application with the Veterans Administration stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. The courses were subsequently approved, and Alvey, Sechrist, and others aggressively marketed the courses to veterans who were eligible to receive the benefits.
However, Caldwell did not participate in developing or teaching the online courses. The veterans were instead enrolled in online correspondence courses developed and administered by a sub-contractor of Ed4Mil. Neither Ed4Mil nor its sub-contractor were disclosed to the government, and neither were eligible to receive Post-9/11 GI Bill benefits.
Alvey and others concealed the true nature of the courses from the government and the veterans who enrolled in the courses. Thousands of veterans enrolled in the online courses believing they were taking courses from Caldwell. The scheme caused the United States to pay more than $24 million in tuition benefits under the Post-9/11 GI Bill.
“David Alvey knowingly and willfully abused his position for personal gain and did so at the expense of those who truly deserve better – our veterans who were looking to make their dreams of a higher education a reality,” Debbi Mayer, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Eastern Regional Office, said. “I’m proud of the work of OIG Special Agents and our law enforcement partners for holding Mr. Alvey accountable for his criminal actions. America’s veterans and students deserve nothing less.”
“The guilty plea by David Alvey sends a clear and unequivocal message that the FBI and our law enforcement partners will relentlessly pursue those who defraud the government. This is the third conspirator who pleaded guilty in this fraud scheme. These crimes are especially egregious since they target our veterans and the educational system,” Timothy Gallagher, Special Agent in Charge of the Newark FBI Field Office, said.
The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of his plea agreement, Alvey has agreed to a prison term of five years and to forfeit proceeds of the crime, including $702,073 in cash proceeds, as well as artwork, and stock. Sentencing is scheduled for May 15, 2018.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Smith in Newark; the FBI, under the direction of Special Agent in Charge Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Assistant Special Agent in Charge Mayer, with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys David M. Eskew and David Malagold of the U.S. Attorney’s Office Criminal Division in Newark, Assistant U.S. Attorney Nicole Mastropieri of the Healthcare and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Recovery and Money Laundering Unit.