• Sun. Jan 29th, 2023


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Man Posing as Students Convicted in $1.4 Million Loan Scheme

A Louisiana man was convicted on Wednesday of defrauding the federal student loan system of more than $1.4 million in an elaborate scheme that involved posing as students and hiring impersonators to get financial aid he then pocketed.

The man, Elliott Sterling, of Baton Rouge, obtained grants and loans intended for 180 students by using their personal information to fill out federal financial aid applications and enroll them in classes at Baton Rouge Community College from September 2017 to November 2019, prosecutors said.

Mr. Sterling, who was 32 when he was charged in September 2020, took most of the financial aid money for himself and spent more than $253,000 of it at casinos in Louisiana, Nevada and Pennsylvania, prosecutors said.

A jury in the United States District Court for the Middle District of Louisiana convicted Mr. Sterling on 15 counts of wire fraud, financial aid fraud and money laundering. The F.B.I. had seized about $422,600 of the proceeds, which the jury ordered be forfeited.

Mr. Sterling, who does not have a law degree, represented himself in court this week, saying he was innocent and claiming that he was being punished for “making money,” The Advocate, a Louisiana newspaper, reported. Mr. Sterling did not respond to requests for comment on Saturday.

Edd Cole, special agent in charge of the southwestern regional office of the Department of Education’s Office of Inspector General, said in a statement that the office was “committed to fighting student aid fraud and will continue to aggressively pursue anyone who orchestrates or participates in these types of crimes.”

Baton Rouge Community College said in a statement that it hoped that Mr. Elliott’s conviction would deter others “seeking to deceive and misuse the federal student loan process.”

Kizzy Payton, a spokeswoman for the college, said on Saturday that the fraudulent activity was first brought to the school’s attention after the F.B.I. received an alert from BankMobile, a banking service the college uses to process financial aid.

“We then partnered with the F.B.I. and maintained our strong internal controls to help minimize the impact of the fraudulent activity and provided all the requested documents to support the investigation,” Ms. Payton said.

Mr. Sterling first approached potential students to enroll in classes in September 2017 and offered to help them for a fee. He also promised some of the students that they could get financial aid that they would not need to repay.

To collect federal grants and loans, Mr. Sterling used the students’ personal information and coupled it with fraudulent obituaries, fraudulent diplomas and other falsified details about their background to complete the Free Application for Federal Student Aid, known as FAFSA.

Most of the applicants did not qualify for federal financial aid without the faked documents, including 145 students who had not actually received a high school diploma or its equivalent, such as a G.E.D., and students who were incarcerated, prosecutors said. The students typically did not have access to their accounts with FAFSA, the college or the bank accounts that received the financial aid.

None of the students made academic progress at the college and 172 failed or withdrew from every class they were enrolled in, prosecutors said.

In one case, Mr. Sterling collected nearly $7,000 in federal student aid on behalf of a student but ultimately only gave the student $1,000.

Mr. Sterling concealed his role in preparing the financial aid documents and signed a form promising to repay the Department of Education for the loan, a master promissory note, posing as the student.

Most students who were awarded money told investigators that they were unaware that they had applied for student loans and that Mr. Sterling was the one who had signed notes promising that they would repay the loans.

Mr. Sterling went with many of the students to the college campus to help them complete the financial aid process. He also occasionally presented himself as a student and offered to pay individuals to impersonate students at the financial aid office.

In addition to the student loan scheme, Mr. Sterling also received a $90,000 loan from the Small Business Administration for his business, Sterling Educational Consulting L.L.C., after he falsified his company’s revenue in the application for aid meant to help businesses affected by the Covid-19 pandemic.

Mr. Sterling’s sentencing is scheduled for July 7.