Pastors Indicted in $4 Million Student Loan Scheme

Published 26 November 08 04:19 PM | Student Loan Girl

The husband-and-wife pastors of a Houston church have been indicted in a student loan scheme in which the pastors and another church leader allegedly defrauded the government of millions of dollars in student loans, according to a news release from the U.S. Attorney General Office (“Leaders of ‘Fishers of Men’ Church Charged With Student Loan and FEMA Fraud,” Nov. 20, 2008).

Eric and Sheila Washington, then pastors of the Fishers of Men Worship Center, as well as church treasurer Tony Overstreet, are accused of filing 140 student loan applications totaling more than $4 million on behalf of church members over a two-year period. The church leaders say they intended to use the money to fund a new church building.

The Washingtons and Overstreet allegedly coaxed college-age church members into providing the church leaders with their personal identifying information. The three church leaders then used that information to apply for student loans in the church members’ names and provided the student loan lenders with the Washington’s address so the loan funds could be mailed directly to their home.

Students were typically allowed to keep $2,000 of the loans — which were generally in the amount of $25,000 or $30,000 — and were promised that Fishers of Men would repay the loans within six months, according to the indictment.

Non-Student Church Members Roped Into Scheme

The indictment further alleges that the Washingtons and Overstreet recruited Fishers of Men church members to falsify their paystub information in order to qualify as co-signers on the student loans.

Once the trio had acquired information from every eligible churchgoing student, the Washingtons and Overstreet allegedly found a new way to get student loan funds — by enrolling other church members in community colleges and then withdrawing the church members from classes as soon as the loans were funded.

Bank One funded over 90 student loan applications worth $2.75 million before the fraud was discovered. The Washingtons and Overstreet then used the same scheme with Wells Fargo, through which they submitted more than 50 applications for college loans totaling $1.5 million.

Eric Washington and Fishers of Men Secretary Felicha Williams are also charged with conspiring to defraud FEMA (Federal Emergency Management Agency) of funds related to a program that reimbursed shelters for housing Hurricane Katrina evacuees by overstating the number of evacuees the church temporarily housed.