Nine Individuals Indicted For Wire Fraud And Student Loan Fraud
The Defendants Are Facing A Forfeiture Allegation Of $351,333
San Juan, Puerto Rico – On July 16, a federal grand jury returned an 18-count indictment against nine individuals for student loan fraud, announced United States Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez. The investigation was conducted by the Department of Education, Office of Inspector General.
Charles Santana, Jessica Rodríguez-Velàzquez, Eliezer Santana-Cruz, Nydia I. Cruz-Rodríguez, Alexis Cockran-Cruz, José Lanause-Cruz, Yamille Santana-Cruz, Matilde Santana-Cruz, and Irma Montañez-Aponte, aiding and abetting each other, devised a scheme in which the defendants would obtain money in the form of student financial aid funds provided and insured by the U.S. government to which they were not entitled, under false and fraudulent pretenses.
According to the indictment, defendant Charles Santana recruited other persons who did not intend to attend school or earn a degree (“the straw students”). Santana promised the straw students a cut of the student aid funds that would be fraudulently obtained by the scheme. Santana and Rodríguez-Velàzquez instructed the straw students to enroll in online courses at InterAmerican University (IAU), Guayama. The straw students enrolled in this program in order to obtain the student aid funds without any intent to earn a degree or to use the money for authorized educational expenses.
Santana solicited personal identifying information from the straw students for the purpose of using their identities to apply for federal student aid for each straw student. He falsely stated on master promissory notes that the proceeds of student aid funds would be used for authorized educational expenses, when in truth and fact, Santana knew that the straw students did not intend to attend school or earn a degree, and that the money would not be used for authorized educational expenses.
The defendants caused federal student loans and grants to be awarded to themselves and others based on false information provided on the IAU and Free Application for Federal Student Aid (FAFSA) applications, and the master promissory notes, which resulted in student aid funds being disbursed to themselves and others. The defendants caused student aid funds to be wrongfully disbursed in an aggregate amount in excess of $300,000.00.
Santana and Rodríguez-Velàzquez received student aid funds, and they gave a cut of the money to the straw students. Santana completed the online assignments for each straw student so that they appeared to be active students and the financial aid would continue to be disbursed to the defendants.
Defendant Charles Santana is facing eight counts of aggravated identity theft. According to the indictment, he transferred, possessed, and used, without lawful authority, a means of identification of another person, that is, the names, social security numbers, and electronic signatures of other persons, in order to be able to carry out the scheme.
“These individuals are charged with defrauding education programs for personal gain,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “We will continue to investigate and prosecute those who engage in corrupt acts which directly affect federal programs and the availability of these funds for its intended recipients,” stated Rodríguez-Vélez. Said U.S. Attorney Rosa Emilia Rodríguez-Vélez
“Scams like the ones these nine individuals are alleged to have perpetrated steal money from hardworking taxpayers. They are criminal enterprises that we call “fraud rings” -- large, loosely affiliated groups of criminals that are operating around the country, exploiting distance education programs at colleges and universities in order to fraudulently obtain Federal student aid,” said Yessyka Santana, Special Agent in Charge of the U.S. Department of Education's Southeastern Regional Office. “They see it as an opportunity to grab some quick cash with relatively little effort. We see it for what it is -- a crime. As the law enforcement arm of the U.S. Department of Education, ensuring that those who steal student aid or game the system for their own selfish purposes are stopped and held accountable for their criminal actions is a big part of our mission.”
This case is being prosecuted by Assistant U.S. Attorney Justin R. Martin. The maximum penalties are twenty years of imprisonment for the wire fraud and five years for the student loan fraud. Defendant Santana is also facing two years of imprisonment consecutive to any sentence, for each of the aggravated identity theft charges. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.