Student Loan Blog : fraud

Nurse Steals Patients’ Identities in Scheme to Obtain Student Loans

Student Loan Girl — Thu, 26 Mar 2009 17:12:00 GMT

Risha Renee Shaw — who graduated in November 2008 as a licensed practical nurse from Keiser Career College — paid her way through school by fraudulently obtaining up to $18,000 in student loans, reports the St. Petersburg Times (“Student Loan Scheme Stole IDs of Elderly, Police Say,” March 20, 2009).

Arrested last Friday by St. Petersburg police, the 30-year-old Shaw was charged with two counts each of exploitation of the elderly and identity theft, and is currently being held at the Pinellas County Jail on a $40,000 bond.

Apparently, police say, Shaw exploited her relationship as a nurse with two of her patients and used their identities to obtain two loans from Sallie Mae, the nation’s largest student loan provider. Victims included an unnamed 83-year-old man and 80-year old Helga Holsten, who died in September of last year.

Bob Andelman, Holsten’s son-in-law, was shocked that someone would steal Holsten’s identity to obtain a loan. He was even more shocked, according to the St. Petersburg Times, at how poorly executed the fraud was.

“They put a picture of a young blond woman onto my mother-in-law’s photo ID,” Andelman said. “But they left all the other information the same,” including the birth year which still read 1928.

Besides how shoddily the fraud was executed, Andelman was surprised that no one spotted the fraud, despite inconsistencies with the photo ID and other documentation.

“All of the document work was incredibly sloppy,” Andelman said. “My mother-in-law’s name was written differently on every piece of paper,” he said. Anyone could have spotted that something was wrong with the applications, or almost anyone, he speculated.

Sallie Mae finally removed the loan from his mother-in-law’s credit report, Adelman said, after several months of working with the lender to resolve the situation.

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Former Student Finance Corp CEO Gets 5 Years in Prison for Loan Fraud

Student Loan Girl — Thu, 12 Feb 2009 22:38:00 GMT

The former head of bankrupt Student Finance Corp. has been convicted of fraud — his second fraud conviction in two years — after he was found guilty of lying on loan documents used to secure a $25 million line of credit for the student loan company and to obtain $7 million in personal loans, reports The Delaware County Daily Times (“Radnor Businessman Gets 5 Years for Fraud,” Feb. 9, 2009).

According to David Weiss, acting U.S. attorney for the District of Delaware, former student loan executive Andrew Yao also fraudulently obtained millions of dollars in bank loans to purchase a private plane worth $4 million and to refinance his $3 million vacation home in Nantucket, Mass.

Yao has been sentenced to five years in prison and has been ordered to pay $12.5 million in restitution, Weiss said. In 2007, Yao was convicted of bankruptcy fraud after lying about giving almost $700,000 to his mistress, former Playboy centerfold Alexandria Karlsen Wolfe, and about gambling away $150,000 at two Las Vegas casinos.

In his most recent fraud conviction, Yao pleaded guilty to seven counts of making false statements to a financial institution, and one count each of mail fraud, wire fraud and engaging in an illegal monetary transaction. In addition, Yao is subject to criminal forfeiture of $1 million.

As part of the loan scheme, Yao hired an accountant to prepare fraudulent personal tax returns for himself and his corporation from the early 1990s up through 2002. These tax returns were different than the actual returns filed with the IRS, Weiss said, and in many cases, the returns overstated Yao’s income by several million dollars.

“The sentence imposed on Mr. Yao sends an important message to all those who would think about attacking our financial system through fraud,” Weiss said. “His false statements led to the loss of millions of dollars by financial institutions, losses that affected those institutions, their employees, their shareholders and the public.”

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Women Arrested for Trying to Fraudulently Bilk Lenders of $2.2 Million in Student Loans

Student Loan Girl — Tue, 17 Jun 2008 01:04:00 GMT

Five Seattle women in a mother-daughter bank fraud ring have been arrested for allegedly submitting bogus loan applications and obtaining $690,000 in student loans, “which they used for their own benefit and purposes,” according to an article in the Seattle Post-Intelligencer (“5 Women Arrested in $690,000 Student Loan Scam,” June 10, 2008).

The women, who submitted student loan applications worth about $2.2 million, allegedly stole the identities of people with names similar to their own and used those names as co-signers on loan applications, Joe Velling of the Social Security Administration Inspector General’s Office told the newspaper.

Assistant U.S. Attorney Norman Barbosa said the fraud ring was discovered after one of the victims alerted authorities to discrepancies on her credit report.

“You don’t know about this (fraudulent) loan until you refinance a home or try to make a major purchase,” Barbosa said. “Suddenly you have a $40,000 student loan that you are the co-signer of.”

Authorities do not know how the fraud cases were not discovered sooner during the process schools follow to verify student loan applicants’ enrollment.

If found guilty, the women face up to 30 years in prison and a $1-million fine on the bank fraud charges. They also face an additional two years in prison and a $250,000 fine in the identity theft charges.

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