Our firm is committed to providing the best representation as possible. Our attorneys are experienced and knowledgeable and have the proper tools and information to help you with any investigations or charges.

Fraudulent practices within school systems are very serious offenses, and we strongly recommend that you contact one of our attorneys so that we can help you understand the law and minimize your risk.

School fraud affects anyone in charge of the operations of the educational institution. Educators, principals, board members, admissions directors, student loan officers, even students: all are affected by fraud charges. Even a subsidiary school subsidiary can suffer ill effects if engaged in these acts. It destroys reputations and involves malign government sanctions.

If you or a loved one has been charged or is being investigated for fraud, please call us today. We will help you through the entire process and provide the best possible representation.

Brief Overview of the United States Education System

US education is one of its largest sectors. There are over 100,000 elementary and secondary schools, along with thousands of colleges. It employs hundreds of thousands of individuals that are involved in creating, administering, and facilitating educational goals.

Over 50 million students are in elementary schools and secondary education institutions. There are close to 20 million in post-secondary institutions. This number is expected to grow every year.

US education uses billions of dollars in federal and state funds every year. In 2015, the US spent nearly 70 billion dollars on education.1  In Utah alone, spent over 4 billion dollars in 2016.2  Due to the amounts state governments and the Department of Education spending on education, some individuals utilize illegal acts to access these funds.


What is “School Fraud?”

School fraud is where an individual or organization engages in or facilitates deceptive practices that defraud individuals, organizations, or the government of funds. Due to the nature of education and the many various aspects it embodies, the practices that could be considered school fraud are numerous. Here are a few practices that would be considered school fraud:

–       Providing college certificates or high school diplomas for a charge (diploma mills)

–       Referring ineligible students to diploma mills

–       Falsifying student applications to ensure admittance

–       Advertising and charging for fictitious schools

–       Using the identities of another to apply for financial aid

–       Providing certificates that are intended to deceive others of their legitimacy

–       Knowingly providing false information on a financial aid form

–       Coercing employees to provide false information to prospective and current students

–       Misrepresenting about the transferability of credits

–       Knowingly submitting an application for financial aid of ineligible students, such as students without a diploma or GED, or were previously convicted of a drug offense.

–       Falsely stating that your institution is accredited

–       Misrepresenting your job statistics for graduates

–       Falsifying admissions data

–       Using financial aid for unapproved expenses

–       Allowing or endorsing subsidiaries to use such practices

What Does This Mean?

In short, any practice to deceive, mistate, falsify or coerce an individual, organization, or the government for personal gain will be found as school fraud. These practices can be in violation of many state and federal statutes. However, the most common statutes that will be violated are the False Claims Act, the Wire Fraud statute, and the Aggravated Identity Theft statute.

Due to the various ways that a practice may be viewed as school fraud, the complex nature of educational systems and the law, and the seriousness of violating state and federal law, we strongly recommend you contact us with any concerns or questions.

Please call us today for a free legal consultation, and we can help you be aware of any current practices that may or will violate the law.

What is the False Claims Act?

The False Claims Act prohibits using any known false information to obtain funding from any government program. Violating this act can come with very severe penalties.Since most schools use some form of government funds, this can be violated in any number of ways.

Anyone who applies for financial aid fails to disclose a previous drug conviction. A financial aid officer who tells students how to use false information to obtain the best possible financial aid. Using identity theft to apply for financial aid to disperse government funds to yourself. The possibilities are seemingly endless. Even conspiring to make a false claim is a violation.

Also, it is important to note, that this law contains a relator provision – a “whistleblower” option. Not only does this provision permit an individual to sue on behalf of the government, but it also incentivizes this activity by allowing the “whistleblowers” a percentage of the settlement. Many states have adopted similar provisions in their laws as well.

Penalties of Violating the False Claims Act

Violations of the False Claims Act have a penalty of up to 10,000 dollars, three times the value of the cost incurred due to the false claim, and any costs of a civil action brought against the individual.3

What is the Wire Fraud statute?

The Wire Fraud statute prohibits any individual or organization from using false or misleading information via a transmission for financial gain. This also prohibits the intention of using such information. This statute encompasses all communications through the wire (including internet), mail, radio, or television.

This law applies specifically to foreign and interstate commerce. However, due to the modern age and quickly information can easily become interstate or even foreign, even fraudulent information contained in mailers could be considered a violation of this statute.4 If your advertisements have information that misleads or could mislead, it will violate this statute.

It is expected to put your financial institution in the best possible position. However, if you inaccurately present data about job prospects, admissions, etc., in order to achieve a better position, you will be in violation of this statute. Even presenting the information accurately but do it in such a way to make it misleading, will also violate this statute.

If you have any concerns or questions if your advertisements or other information you provide could be in violation of this statute, don’t hesitate to call one of our attorneys today.

Penalties of Violating the Wire Fraud Statute

Violations of the Wire Fraud statute can have substantial fines or imprisonment for up to 20 years or both. If your fraudulent practices affect a financial institution, the fines can increase, and the maximum prison sentence can be 30 years.5

What is the Aggravated Identity Theft statute?

The Aggravated Identity Theft statute prohibits anyone from knowingly using, transmitting, or possessing, the information of another in the perpetration of another federal crime.

This was created in response to a large number of cases that involved identities being stolen. It provided more severe penalties than the previous Identity Theft statute.

This provides a consecutive sentence of two years if convicted. This means that this will be in addition to any sentence received for other federal violations. For example, if you receive a 5-year penalty for False Claims Act violations and are convicted of aggravated identity theft, you will serve seven years.

This statute is typically broken by people using stolen identities obtained through criminal means, on federal student aid applications. This statute requires the individual to know they are using a stolen identity when committing an offense. But, this is easy to establish. If you are using a stolen identity to commit a felony, can be ruled that you knowingly violated this law.

Penalties of Violating the Aggravated Identity Theft Statute

Violations of the Aggravated Identity Theft statute can result in a consecutive prison term of 2 years in addition to any other penalty imposed by another federal violation.

Recent cases involving school fraud

Article 1: Man sentenced for massive international diploma mill scheme

Charges: Wire fraud, conspiracy to commit wire fraud, and aggravated identity theft

Allegations: A man ran an elaborate worldwide scheme that tricked individuals into believing they were paying for education and provided invalid diplomas.

In 2017, a Pakistani man orchestrated a complex scheme that deceived online consumers into believing that they were paying for tuition and other education expenses. These consumers were never given any education and were awarded fake diplomas.

According to a DOJ press release, Umair Hamid, along with other co-conspirators, used deceptive tactics over the phone and online to trick tens of thousands of individuals to pay for fake schools through an organization known as Axact. These individuals believed that they were being enrolled in these schools and would receive an education.

After paying substantial upfront costs, no education was received, and they were subsequently given a fake diploma. Then sales agents were instructed to sell additional certifications to help consumers make their diplomas seem more legitimate. If people inquired about accreditations or other information about these schools, they were provided with false information.

This scheme lasted for a few years and defrauded consumers of roughly 140 million dollars.

Hamid was arrested in 2016 and pled guilty to the charges. He was sentenced to 21 months in prison and ordered to pay over 5.3 million dollars in forfeiture.

Article 2: Former professor sentenced to 6 months in prison for college certificate scam

Charges: Wire and mail fraud, conversion, solicitation of bribes, and obstruction of justice.

Allegations: A former professor provided fake college certificates in exchange for money.

In 2018, a former professor from CUNY Medgar Evers College sold a number of false college certificates for a range of healthcare courses. He sold the certificates on behalf of the college and pocketed the proceeds for himself.

According to the DOJ press release, Mamdouh Abdel-Sayed, a former tenured professor for the CUNY Medgar Evers College, provided college certificates for some healthcare-related courses, such as phlebotomy. Abdel-Sayed would create and sell these certificates, sometimes up to 1,000 dollars apiece, even if the students did not attend the courses.

Abdel-Sayed would also respond to employment agencies’ requests and inform the agencies that the certificates were valid and from CUNY Medgar Evers College. None of the proceeds went to the college, and the college never authorized Abdel-Sayed for these courses.

Abdel-Sayed also went to lengths to avoid arousing suspicion with school security guards.

During the official investigation, Abdel-Sayed also informed students with the certificates to lie about them. One of those students happened to be an undercover agent.

Abdel-Sayed pled guilty to these charges and was later sentenced to 6 months in prison. He was also ordered to pay 40,000 dollars in restitution and forfeiture.

Article 3: Woman sentenced to 81 months in prison for federal student aid fraud

Charge: Wire fraud, conspiracy to commit wire fraud, and aggravated identity theft.

Allegations: Stolen identities were used to defraud the government in the federal student aid scheme.

In 2018, three Ohio women used stolen identities to enroll in community college in Arizona. After enrolling the identities, applications were submitted for federal student aid. According to the DOJ press release, Janice M. Shufford and others enrolled the identities of hundreds into Maricopa Community College to defraud the government of federal student aid funds.

Shufford used the stolen identities to enroll students in community college. After enrolling, Shufford used the information to apply for federal student aid. The school received the funds, and excess funds went into bank accounts or address Shufford and her accomplices used. The scheme stemmed close to 1.8 million dollars. She was sentenced to 81 months in prison.  

She was also ordered to pay 1.2 million dollars in restitution.

What should I do if I have been charged with school fraud?

Call us!

Our team of dedicated, knowledgeable, and experienced attorneys can help provide you with the best possible defense and representation. The law is complex, and the violations can be very severe. School fraud involves numerous federal laws, and if proper legal counsel is not sought, you could be facing tremendous fines and lengthy prison sentences for your violations.

You need an attorney that has experience involving fraudulent practices with education. Not only can we help you with current allegations, but we can also help minimize your risk by helping you know the law.

Recent violations of these statutes show that these violations are not taken lightly. The impact of allegations of fraud and investigations can have a profound impact on your life and your loved ones. If you run an educational institution, the damage to your reputation can be irreparable.

Let an experienced attorney from our firm guide you through this process.

If you or a loved one has been charged or is being investigated for fraudulent practices, call our firm today! Our team is dedicated to providing the best possible outcomes for you!