Suspects indicted in fraud case

On Sept. 18, the Office of Inspector General (OIG) issued a press release detailing an alleged financial aid fraud scam that targeted numerous colleges in California including San Diego City College.

U.S. v. Stacey Kinyada Lee et al, being prosecuted by U.S. Attorney Kirk Sherriff, is the alleged fraud case that involves City.

There are six other cases the OIG is prosecuting that occurred on other college campuses that were supposedly operating similarly to the one at City.

Lynn Neault, vice chancellor of student services for the San Diego Community College District, told City Times that the district has reported numerous suspect financial aid claims to OIG over the years but this is the first one she knows of that led to federal indictments.

According to Neault, the district does routine monthly checks of financial aid applications and whenever there appears to be suspicious activity, the district notifies OIG.

Suspicious activity could include anything from more than one person using the same email or home address on their applications to different people’s applications having the same social security number listed on them.

According to Neault, in the recent case OIG is now prosecuting, ringleaders of the alleged scam used stolen identities of severely disabled people who were not students to enroll in online courses and collect financial aid payments. By using stolen identities of disabled people, the alleged ringleaders of this scam hoped to avoid having to physically come in to City’s financial aid office to present identification.

Neault also told City Times that alleged ringleaders of this kind of scam will access online classes for a period of time to create the illusion the student is active in the course in order to collect the maximum aid amount.

Financial Aid Manager Greg Sanchez said that City financial aid along with the district are always diligent in attempting to detect and report fraud. Neither he nor Neault would give details about how they go about finding fraudulent claims for fear criminals could more easily circumvent the system.

According to the OIG press release on Sept 18., which announced the recent fraud indictments, the number of financial aid fraud cases that OIG is pursing has grown from 16 in 2005 to 119 in 2012.

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Suspects indicted in fraud case