Singapore Resident Pleads Guilty In Manhattan Federal Court To Soliciting Millions Of Dollars In Pre-IPO Stock Scheme
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Debbi Mayer, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General, Northeastern Regional Office (“ED-OIG”), announced today the unsealing of a criminal complaint charging four individuals, including the former Director of Financial Aid of a graduate school receiving federal funds (the “Graduate School”) and three students, with fraudulently obtaining hundreds of thousands of dollars from the Graduate School, bribery, and kickback scheme. MELANIE WILLIAMS-BETHEA, the former Director of Financial Aid, and student ANNICE KPANA were arrested this morning and presented today before U.S. Magistrate Judge Barbara Moses. Student CARMEN CANTY was arrested this morning in the Middle District of North Carolina, and student KYLA THOMAS, a/k/a “Kyla Britt,” was arrested this morning in the District of South Carolina; both are expected to be presented in those districts today.
U.S. Attorney Geoffrey S. Berman said: “As alleged, for years, these four defendants took advantage of a federal program intended to assist those who need financial aid to make higher education a reality. The defendants’ alleged falsification of documents to show extreme financial hardship enabled the student defendants cumulatively to pocket hundreds of thousands of dollars for which they did not qualify. A substantial portion of this stolen money was allegedly kicked back to Williams-Bethea. Student loan fraud ultimately affects all students and taxpayers with increased fees and interest rates.”
ED-OIG Assistant Special Agent in Charge Debbi Mayer said: “Today’s action alleges that Melanie Williams-Bethea knowingly and willfully abused her position of trust for personal gain and recruited others to assist her in a fraud scheme that targeted the very students she was supposed to help. OIG Special Agents will continue to aggressively pursue those who seek to enrich themselves at the expense of our nation’s students. America’s students, their families, and taxpayers deserve nothing less.”
According to the Complaint unsealed today in Manhattan federal court:
From 2008 through 2017, WILLIAMS-BETHEA, KPANA, CANTY, and THOMAS engaged in fraud and bribery schemes resulting in the loss of hundreds of thousands of dollars from the Graduate School. WILLIAMS-BETHEA, who was employed by the Graduate School as the Director of Financial Aid during the relevant time period, perpetrated the scheme by approving aid payments to KPANA, CANTY, and THOMAS (collectively, the “Students”) well in excess of their need, and then obtaining kickback payments from the students of portions of the unjustified aid.
Specifically, WILLIAMS-BETHEA approved excessive “cost of attendance” figures for the Students that did not comport with their actual needs or costs of living, which had the effect of increasing the amount of financial aid they were eligible to receive, and by then approving stipends for the Students up to – and at times exceeding – these inflated amounts. To facilitate some of the stipends, WILLIAMS-BETHEA created fraudulent stipend request forms for financial awards to the Students, which gave the appearance that professors or other administrators had requested stipends for KPANA, CANTY, and THOMAS, when in fact they had not, and then approved the fraudulently requested stipends herself.
After WILLIAMS-BETHEA facilitated these awards of unjustified financial aid, KPANA, CANTY, and THOMAS paid WILIAMS-BETHEA more than $350,000 in kickbacks.
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WILLIAMS-BETHEA, 47, of Springfield Gardens, New York, KPANA, 35, of Valley Stream, New York, CANTY, 39, of Winston-Salem, North Carolina, and THOMAS, 39, Greer, South Carolina, each are charged with one count of conspiracy to commit bribery and fraud in connection with federal student aid, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of bribery, which carries a maximum sentence of 10 years in prison. WILLIAMS-BETHEA, CANTY, and THOMAS are each also charged with one count of fraud in connection with federal student aid, which carries a maximum sentence of five years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Berman praised the investigative work of the Department of Education Office of Inspector General in this investigation, and thanked the Graduate School for its cooperation with the investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Thomas McKay and Alex Rossmiller are in charge of the prosecution.
 As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.