Scam artists posing as students or stealing identities from other people illegally obtained more than $770,000 in financial aid and loans via California community colleges and online schools, federal prosecutors said Tuesday.
Seventeen people have been indicted since August in six cases that involve 15 California campuses, including Santa Barbara City College, Bakersfield College, Antelope Valley College and San Diego City College, according to the U.S. attorney's office in Sacramento. In some instances, plotters used identities of severely handicapped people and prisoners to apply for aid and some recruited "straw" students with no intention of attending school who kicked back money, the indictments said.
"At this time of year, as college students begin classes at schools throughout the state, it is important to send the message that fraud against student assistance programs will not be tolerated," said Benjamin B. Wagner, U.S. attorney for the Eastern District of California, in a statement. "Those who rip off federal aid funds can expect to find themselves in a prison cell instead of a classroom."
The U.S. Department of Education's Office of Inspector General also is working on the cases.
The 17 suspects have pleaded not guilty and all but one have been released on bail, said Lauren Horwood, a spokeswoman for the U.S. attorney's office. If convicted, they face up to 20 years in prison plus fines.
Some investigations were triggered when schools noticed repeated addresses and phone numbers and similar handwriting in applications or when people complained that their identities were stolen, Horwood said.
A bank spotted spending in Las Vegas from special debit cards loaded with federal funds that were supposed to be for books and other expenses in the Kern Community College District. In that case that dates to 2010, prosecutors allege Shauna Marie Febrega, 32, of Lancaster committed mail and wire fraud to steal $70,000 in federal Pell grants and other money.
Michele Bresso, an associate vice chancellor of the Kern district, which includes Bakersfield College, said administrators there notified federal authorities after the bank passed on the suspicions. That district now uses computer screening and other methods to better detect possible fraud, she said.
California community colleges are vulnerable to potential scams because they enroll students on an open admission basis and do not require transcripts from high schools or other colleges, Bresso added.
The federal crackdown, Bresso said, "protects financial resources for our students and actually protects the seats available in classes. The people who sign up for a class fraudulently are taking up the space for students who really want to be there."
In the case with the largest monetary value of the six, prosecutors allege a conspiracy among seven defendants who stole more than $285,000 in federal education money through several colleges around the state dating as far back as 2007. Of them, Michelle Wright, 31, of Stockton, and Janeigh Mendoza, 31, of Tracy, used identity information from the handicapped who are "unable to read or write, let alone attend college," the indictment stated.