U. S. Department of Education Office of Inspector General Semiannual Report to Congress: N



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Fraudulent Loan Discharges/Deferments

Individual falsely claimed disability to have loans totaling more

than $16,000 discharged

Robin Cannon Sentenced: 11/25/03 $17,996

Individual allegedly falsified death certificate and other

documents to illegally discharge more than $150,000 in student

loans and allegedly used false Social Security numbers to

illegally collect benefits

Jeffory Brown Arrested: 11/6/03

Individual fraudulently received more than $31,000 in

unclaimed property and used false documents to discharge

approximately $1,700 in student loans

Adriese Thomas Convicted: 12/19/03

Table 7: Investigation Services Cumulative Actions

(October 1, 2003 to March 31, 2004) (Cont.)

Summary of Investigation Subject Name Action This Period*

Fines/

Restitutions

Civil

Recoveries

Semiannual Report To Congress: #48



31

Foreign School Recipient Fraud

Doctors forged school certifications, exceeded loan limits, and

conspired with a foreign fraud ring to fraudulently obtain more

than $147,000 in FFEL funds

Max Noel Sentenced: 3/1/04

Herold Pierre-

Louis

Sentenced: 3/1/04



Individual obtained more than $160,000 in FFEL proceeds

falsely claiming he and his brother were enrolled at a school in

the United Kingdom. He also prepared or submitted more than

2,300 additional fraudulent FFEL applications requesting

approximately $43.8 million under multiple fictitious identities

falsely claiming enrollment at United Kingdom schools

Shane Bybee Convicted: 2/10/04



FINANCIAL AID PREPARER FRAUD

Financial aid consultant provided fraudulent student aid

assistance; wife falsified income to obtain approximately

$35,000 in student aid for children

Richard

Bukowsky


Civil Filing: 1/14/04

Myrtle Bukowsky Civil Filing: 1/14/04



Clients Prosecuted

Consent judgments entered for three individuals that obtained

federal student aid for their children after using the assistance of

a fraudulent financial aid consultant

Jill Collins Civil Settlement:

2/23/04


$21,279

Rhonda Kellner Civil Settlement:

12/16/03

$55,000


Phyllis

Lewkowicz

Civil Settlement:

10/28/03


$39,862

Other

Individual used stolen bank information to post online student

loan payments to student loan account and used loan money to

make payments on personal account causing loss of

approximately $120,000

Tamela Nunn Sentenced: 3/10/04 $8,750

Daresse Leigh Sentenced: 1/30/04 $8,750

Provider of vocational rehabilitation services repaid $545,124

in Title I funds after receiving unallowable payments

Abilities of FL

Incorporated

$545,124


Individuals associated with a career development institute

charged in a superseding indictment with conspiracy to obstruct

justice, theft of honest services, aiding and abetting, and making

false statements to a federal agent in connection with no-show

jobs

Gerald Phillips Indicted: 1/22/04



Giuseppe

Polimeni


Indicted: 1/22/04

Jamie Dwyer Indicted: 1/22/04

Luisa Cardaropoli Indicted: 1/22/04

School employee made false statements to federal agents when

questioned regarding his son's illegal receipt of more than

$19,000 in salary funded in part with Title I funds

Thomas Reilly Sentenced: 12/5/03

Former state employees created false payment vouchers to

illegally obtain Title I funds

Twanda Ross Sentenced: 2/9/04 $20,252

Michelle

Abrajano


Convicted: 11/6/03

Former Puerto Rico Department of Education official and

contractor in scheme to steal more than $4.3 million in

education funds

Jose Omar Cruz Sentenced: 2/11/04

Ruperto Vazquez

Lopez

Sentenced: 2/11/04



Former Department employee stole more than $160,000

through illegal use of government credit card

Jean Williams

Stancell

Sentenced: 12/18/03 $13,800



Table 7: Investigation Services Cumulative Actions

(October 1, 2003 to March 31, 2004) (Cont.)

Summary of Investigation Subject Name Action This Period*

Fines/

Restitutions

Civil

Recoveries

Semiannual Report To Congress: #48



32

Individuals part of a scheme to illegally divert $1.9 in Impact

Aid funds to personal use

Stateson Clarence

Francois

Convicted: 1/5/04

Diallo Cobham Convicted: 1/30/04

John Holmes Convicted: 2/2/04

Daniel Dorcely Convicted: 1/30/04

Department contractor conspired with Department employees

to received more than $121,000 for work he did not perform

James Barksdale Sentenced: 1/30/04 $34,733



Owner and employees of debt collection agency allegedly

submitted fraudulent consolidated loan applications illegally

creating more than $1 million in commissions for themselves

Robert Hazlett Indicted: 3/17/04

Suzanne Prather Indicted: 3/17/04

James Stevens Indicted: 3/17/04

David Honderd Indicted: 3/17/04

Greg Evans Indicted: 3/17/04

* Arrest refers to filing of criminal complaint, indictments include informations, and convictions include pretrial diversions and nolo

pleas.


Table 8: Statistical Profile : October 1, 2003 to March 31, 2004

Six-month Period

Ending 3/31/04

OIG AUDIT REPORTS ISSUED 41

Questioned Costs $5,001,205

Unsupported Costs $3,394,648

Recommendations for Better Use of Funds $244,334,386



OTHER OIG PRODUCTS 30

(Inspections, Attestations, Interim Audit Memoranda, Alert Memoranda, Closeout Memoranda/Letters,

Management Information Reports, and Preaward Audit Services)

OIG AUDIT REPORTS RESOLVED BY PROGRAM MANAGERS 28

Questioned Costs Sustained $143,728,457

Unsupported Costs Sustained $859,929

Additional Disallowances Identified by Program Managers $6,676

Management Commitment to the Better Use of Funds $7,383,859

INVESTIGATIVE CASE ACTIVITY

Cases Opened 91

Cases Closed 94

Cases Active at End of Period 334

Prosecutorial Decisions 88

-Accepted 58

-Declined 30

INVESTIGATION RESULTS

Indictments/Informations 38

Convictions/Pleas 52

Fines Ordered $7,823



Table 7: Investigation Services Cumulative Actions

(October 1, 2003 to March 31, 2004) (Cont.)

Summary of Investigation Subject Name Action This Period*

Fines/

Restitutions

Civil

Recoveries

Semiannual Report To Congress: #48



33

Restitution Payments Ordered $4,183,594

Civil Settlements/Judgments (#) 5

Civil Settlements/Judgments ($) $135,676

Recoveries $545,124

Forfeitures/Seizures $44,230



Table 8: Statistical Profile : October 1, 2003 to March 31, 2004

Six-month Period

Ending 3/31/04

U.S. Department of Education

Rod Paige



Secretary

Office of Inspector General

John P. Higgins, Jr.



Inspector General

Counsel to the Inspector General

Mary Mitchelson

May 2004

This report is in the public domain. Authorization to reproduce it in whole or in part is granted. While

permission to reprint this publication is not necessary, the citation should be: U.S. Department of Education,

Office of Inspector General, Semiannual Report to Congress, No. 48, Washington, DC 20202.



To order copies of this report:

Write to: ED Pubs, Education Publications Center, U.S. Department of Education, P.O. Box

1398, Jessup, MD 20794-1398;

Fax your request to: (301) 470-1244;

E-mail your request to: edpubs@inet.ed.gov;

Call in your request toll-free: 1-877-433-7827 (1-877-4-ED-PUBS). If 877 service is not yet

available in your area, call 1-800-872-5327 (1-800-USA-LEARN). Those who use a telecommunications

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Order online at: www.edpubs.org/webstore/Content/search.asp

This report is also available on the Department’s Website, at: www.ed.gov/about/offices/list/oig.

On request, this publication is available in alternate formats, such as Braille, large print, or computer

diskette. For more information, please contact the Department’s Alternate Format Center at (202) 260-

9895 or (202) 205-8113.

U.S. Department of Education

Washington, D.C. 20202-1510

Official Business

Penalty for Private Use, $300

Anyone knowing of fraud, waste, or abuse involving Department of Education funds

or programs should call, write, or e-mail the

Inspector General’s Hotline

THE TOLL-FREE NUMBER IS:



1-800-MIS-USED (1-800-647-8733)

THE MAILING ADDRESS IS:



Inspector General’s Hotline

Office of Inspector General

U.S. Department of Education

330 C Street, SW

Washington, DC 20202-1510

THE E-MAIL ADDRESS IS:



oig.hotline@ed.gov

Your report may be made anonymously or in confidence.



For information on identity theft prevention

for students and schools,

THE OIG’S IDENTITY THEFT HOMEPAGE IS:



www.ed.gov/misused

U.S. DEPARTMENT OF EDUCATION

OFFICE OF INSPECTOR GENERAL

SEMIANNUAL REPORT TO CONGRESS
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