I am constantly surprised by people who try to make money by scamming student loans. I mean, let’s look at this realistically – the government keeps a close eye on what is going on. And the loans are provided by banks who have legions of people looking for fraud.
Yet every year some new schmuck thinks he or she can make a quick buck and not get caught. Read about the latest incident I’ve heard of, courtesy of LawFuel.com:
The criminal complaint, filed on November 8, 2007, alleges that from 2003 to 2007, Gallagher submitted over 200 student loan applications via the Internet to various financial institutions. The majority of these loan applications originated from one of eight different America On-Line (AOL) email accounts registered in the name of Stephen Gallagher. He submitted loan applications in his own name as well as in the names of unsuspecting individuals, later adding these other individuals to his bank account so he could deposit the student loan checks which were made payable in the name of the borrower. Supporting documentation, such as proof of employment and residence verification, was submitted to each financial intuition via FAX machine. Much of this documentation was determined to be fraudulent.
To date, the Federal Bureau of Investigation has identified approximately 42 fraudulent student loans totaling $624,287.32 to be associated with Gallagher.
A conviction for bank fraud carries a maximum penalty of 30 years in federal prison, a $1 million fine, or both. A criminal complaint is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The investigation was conducted by the Federal Bureau of Investigation with assistance from the U.S. Department of Education.