A 37-year-old woman, in addition to 64 others, was arrested June 24 for one of the nation’s largest student-loan fraud schemes, reports azcentral.com.
According to the news source, from July 2006 to October 2007, Trenda Lynne Halton recruited people to act as students so they could apply for federal grants or federally subsidized loans to attend Rio Salado College, an online school in the Maricopa Community Colleges system. Unlike regular consumer loans, federal loans do not have to be paid back while the student is in school. Furthermore, federal grants, such as Pell, do not have to be paid back at all.
After paying the tuition, the students who had no plans to take any courses, kept the left over money from the loans. Halton charged a fee ranging from $500 to $1,500, according to authorities.
The conspiracy was discovered after a part-time employee at the college observed that several of the financial aid applications appeared to have similar handwriting. As college officials looked further into the case, they realized the applicants lived in the same area and were all enrolling in the same courses. They immediately contacted the U.S. Department of Education.
During the course of the scheme, Halton and others were able to obtain $538,932 in student loans.
Halton was indicted on 130 counts, including conspiracy, financial aid fraud, mail fraud and making false statements in connection to financial aid. The remaining 64 individuals were charged on similar counts.
The maximum penalty for each charge of conspiracy and financial aid fraud is five years in prison and/or a $250,000 fine.
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