Financial Aid Fraud

In 2009, Trenda Halton was arrested for financial aid fraud that involved as many as 136 individuals posing as online students. Halton stole taxpayer funds by creating false documents and helped people take out Pell grants and Staffard loans. The so called “students” were scammers that pretending to be “online students” at Rio Salado Community College in Tempe, Arizona. Halton falsified documents such as social security numbers, drivers license numbers, tax returns and high school diplomas. Halton made between $500-$1500 for each “student” in the scheme. The grand jury indicted 64 people, 55 of them sentenced to time in prison and ordered to pay restitution. In 2010, Halton was sentenced to prison and ordered to pay $581,060. Trenda Lynn Halton recruited close to 136 individuals as part of a financial aid scam. She lead a financial aid fraud conspiracy in 2009.

Federal aid funds are limited so financial aid fraud limits availability of money for students that really need the funds. Money intended for real students was stolen from taxpayer funds. The sentencing and indictment of these individuals should serve as a deterrent to other people that may try to scam the financial aid system. In addition to the legal prosecution in the aftermath of an event such as this, college or universities should prepare beforehand. In order to avoid schemes like this the United States Department of Education and colleges and schools should require that financial aid administrators receive in-depth training on identifying fraud scams. Any individual participating in unlawful actions as it relates to financial aid should be prosecuted.

United States Department of Education (2010). Ringleader of $500,000 Financial Aid Fraud Scheme Sentenced to Prison 55 of 64 Defendants have been Sentenced to Date. Retrieved October 28, 2011 from http://ed.gov/about/offices/list/oig/invtreports/az052010.html

Unknown (2009). Grand Jury Indicts 65 in Arizona Student Aid Fraud Scheme. Fox News Online. Retrieved October 28,2011 from http://www.foxnews.com/story/0,2933,529000,00.html