Three Senior Executives Of For-Profit Schools Plead Guilty In Manhattan Federal Court To Participating In Student Visa And Financial Aid Fraud Schemes
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA, three senior executives of privately owned for-profit schools, pled guilty yesterday in Manhattan federal court to criminal conspiracy charges for their involvement in student visa fraud and financial aid fraud schemes. Specifically, the defendants each pled guilty to one count of conspiracy to commit student visa fraud and one count of conspiracy to commit student financial aid fraud, agreed to forfeit $7,440,000 of proceeds of the student visa fraud conspiracy to the United States Government, and agreed to pay $1,000,000 in restitution to the United States Department of Education (“ED”) for losses from the student financial aid fraud conspiracy. The defendants were arrested in May 2014, along with co-defendants Samir Hiranandaney and Seema Shah, following a long-term investigation by the United States Immigration and Customs Enforcement’s Homeland Security Investigations (“ICE-HSI”), the United States Department of State’s Diplomatic Security Service (“DOS-DSS”), and ED’s Office of the Inspector General (“ED-OIG”). SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA entered their guilty pleas yesterday before United States District Judge J. Paul Oetken.
Manhattan U.S. Attorney Bharara stated: “Suresh Hiranandaney, Lalit Chabria, and Anita Chabira turned their for-profit schools into instruments of fraud to exploit our nation’s foreign student visa and domestic student financial aid programs for their own personal financial gain. Education fraud remains a high-priority focus of ours and we will prosecute all those who make a self-serving sham out of education.”
According to the Indictment filed in this case, the Complaint previously unsealed in this case, and other statements made at public court proceedings, including yesterday’s guilty pleas:
Each of the defendants who pled guilty yesterday was associated with the Micropower Career Institute (“MCI”), a for-profit school with five campuses in New York and New Jersey, or the Institute for Health Education (“IHE”), a for-profit school located in New Jersey. SURESH HIRANANDANEY was MCI’s President; his brother-in-law, LALIT CHABRIA, was MCI’s Vice President and IHE’s President; and his sister, ANITA CHABRIA, was MCI’s Vice President.
Foreign citizens are granted F-1 student visas to remain in the United States as long as they are pursuing full courses of study at approved schools. If a student fails to attend classes as required, the school is required to inform immigration authorities so that the authorities may terminate that student’s visa. SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA failed to report to immigration authorities that foreign citizens were not attending classes at MCI and IHE as required.
The defendants and others fraudulently portrayed MCI and IHE to immigration authorities as legitimate institutes of higher learning where foreign students carried full course loads. In reality, the majority of foreign students at MCI and IHE did not attend the required number of classes. SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA failed to report this to immigration authorities as required, while MCI and IHE continued to collect millions of dollars in tuition from foreign students with delinquent attendance. When a campus of MCI came under regulatory scrutiny, the defendants and others transferred foreign students with delinquent attendance to affiliated schools (such as another MCI campus or IHE) that were not under scrutiny.
In another scheme, SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and others falsified documents in student financial aid files at MCI in order to hide MCI’s failure to timely return financial aid funds received by MCI for domestic students who had dropped out of MCI. In violation of federal laws and regulations governing the administration of financial aid payments to eligible low-income students, MCI failed to return to ED substantial sums of financial aid funds that ED had disbursed to MCI for domestic students who dropped out of MCI without an authorized leave of absence. Specifically, the defendants and others falsified student files by altering documents in the files, or in some cases creating entirely fabricated documents, to conceal MCI’s failure to return such funds to ED and ensure that ED would not terminate MCI’s eligibility for future financial aid funds.
SURESH HIRANANDANEY, 61, LALIT CHABRIA, 54, and ANITA CHABRIA 50, each pled guilty to one count of conspiracy to commit student visa fraud and one count of conspiracy to commit student financial aid fraud, agreed to pay $7,440,000 of proceeds of the student visa fraud conspiracy in forfeiture to the U.S. Government, and agreed to pay $1,000,000 in restitution to ED for losses from the student financial aid fraud conspiracy. Each count carries a maximum of five years in prison. The defendants’ sentencing date is scheduled for September 10, 2015. The penalties described here are prescribed by Congress and provided for informational purposes only, as any sentence imposed on each of these defendants will be determined by Judge Oetken.
The remaining defendants, Samir Hiranandaney, 28, and Seema Shah, 42, face pending criminal conspiracy charges that are contained in the Indictment in this case. The charges against Samir Hiranandaney and Seema Shah are merely accusations and these defendants are presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Bharara praised ICE-HSI, DOS-DSS, and ED-OIG for their work in the investigation this case.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorneys Samson Enzer and Margaret Graham are in charge of the prosecution. Assistant United States Attorney Andrew Adams is in charge of the forfeiture aspects of the case.