Authorities looking to combat student aid fraud in Florida

Fraud and identity theft are in the spotlight in Florida

A recent article in The Tampa Tribune highlighted yet another target of federal and state authorities regarding Internet and white collar crime: fraud relating to federal student aid.

According to the FBI, student loan fraud is increasing. And while the FBI admits that other issues – counterterrorism and cyber crime among them – take precedence, the agency does assist the Department of Education and local law enforcement with resources when available to combat student loan fraud.

While student loan fraud encompasses numerous types of criminal activity, the most sought-after scams involve “distance learning” programs. In 2014, the Office of the Inspector General found that virtual or online classes were more vulnerable to student aid fraud than traditional forms of higher learning.

Currently, the U.S. Government does not distinguish the amount of financial aid required for attending classes in person and attending them online, despite the fact that distance learners generally have fewer costs associated with attending classes.

“Distance learning” under scrutiny

Higher education institutions that get much of their student population in virtual classrooms are often subject to fraud rings. These rings use people who are eligible to receive federal student aid but have no intention of taking classes. Because disbursement of financial aid comes at the beginning of the semester, students may enroll only so long as to receive the financial aid before dropping out.

Then, the individual who set up the financial aid and the “smurf” split the proceeds.

Identity theft involving student loans

While many fraud rings use knowing accomplices to secure financial aid awards, a typical practice also includes using the identities of prospective students without their knowledge to apply for financial aid online.

Identity theft has become a large focus of state and federal authorities, including identity theft arising from applications for student federal loans. Nationwide, identity theft is estimated to account for $36 billion in assets. With that kind of money, prosecutors and authorities are targeting suspected identity theft and fraud rings like never before.

According to the Hodges University Identity Theft Institute, Florida leads the nation in the number of reported identity theft cases. On September 9, Florida Representative Kathleen Passidomo, who has penned legislation to increase the penalties associated with identity theft, said “we want to catch these people and put them in jail.” She spoke at an identity theft luncheon in Naples, Florida.

Accused of student aid fraud or identity theft?

If you have been accused of identity theft or fraud, including fraud relating to federal student financial aid, you may be facing significant and life-altering penalties. Federal felony charges can mean years in jail, significant fines and restitution, and other devastating consequences.

With so much at stake, you need the experience and knowledge of a criminal defense attorney who has spent years defending against white collar crimes in Florida.

Contact O’Brien Hatfield, P.A. to discuss your situation and potential legal options.