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Investigation Report

FOR IMMEDIATE RELEASE:
Wednesday, July 15, 2009

Office of the United States Attorney
District of Arizona

For Information Contact Public Affairs
SANDY RAYNOR
Telephone: (602) 514-7625
Cell: (602) 525-2681

9 FUGITIVES REMAIN IN GROUP OF 65 CHARGED IN $500,000 FINANCIAL AID FRAUD SCHEME

PHOENIX - Nine fugitives have yet to face charges that they were part of a scheme to defraud the U.S. Government out of more than a half-million dollars in student loans. As of today, 54 of the 65 defendants charged in the 130-count indictment have appeared in federal court. The final two defendants are expected to appear in court in the near future. Charges vary for each individual and include Conspiracy, Mail Fraud, Financial Aid Fraud and/or False Statements in Connection with Financial Aid. The lead defendant charged in all 130 counts, Trenda Lynne Halton, 37, of Peoria, Ariz., was arrested on June 24, 2009, and was released pending trial. Trial for all defendants is set for October 6, 2009, before U.S. District Judge Neil V. Wake. A chart with defendant information, along with their respective charges and status, is attached.

Also attached is a wanted poster with photos of the nine fugitives. The U.S. Attorney’s Office, U.S. Postal Inspection Service and Department of Education are asking the public’s assistance regarding the whereabouts of nine fugitives in this case. Anyone with information regarding the location of any of these fugitives is asked to contact Postal Inspector Greg Torbenson at 602-223-3256, Special Agent Adam Shanedling at 562-980-4136, or call the U.S. Postal Inspection Service toll free at 1-877-876-2455 (then select option 2.)

The June 2009 indictment alleges that from July 4, 2006, through October 30, 2007, Halton recruited individuals to act as “straw students” in order to apply for federal financial aid, in the form of Stafford Loans and Pell Grants, with her assistance at Rio Salado Community College. The applicants were neither active students at Rio Salado nor did they intend to become active students. Halton worked with four of those charged to recruit additional individuals to fraudulently apply for, and receive, student financial aid through Rio Salado. A total of 60 additional straw students were also charged as a result of the scheme.

The indictment alleges that during the scheme Halton maintained a system of documents and handwritten records that contained personal information for approximately 136 straw students and potential straw students. The extensive database included items such as dates of birth, Social Security numbers, drivers license numbers, fictitious and valid wage tax statements, tax returns, tax transcripts, fictitious and valid high school diplomas and Rio Salado Financial Aid applications. Halton completed and submitted Rio Salado admission and financial aid applications containing forged and false statements for at least 64 financial aid applicants.

Halton charged a “fee” to straw students ranging from $500 to $1,500. She also accessed Rio Salado online classes, assuming the identity of the various straw students, in order to generate records of the straw students’ “participation” in online classes and cause Rio Salado to authorize financial aid payments to the straw students. During the period of the conspiracy and scheme, Halton and her 64 co- defendants unlawfully caused federally insured loans and grants to be disbursed to unqualified straw students totaling approximately $538,932.

A conviction for each count of Conspiracy or Financial Aid Fraud carries a maximum penalty of five years in federal prison, a $250,000 fine or both. Each conviction for False Statements in Connection With Financial Aid carries a maximum penalty of one year, $100,000 fine or both. Each conviction for Mail Fraud carries a maximum penalty of 20 years, a $250,000 fine or both. In determining an actual sentence, U.S. District Court Judge Neil V. Wake will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The investigation preceding the indictment was conducted by the U.S. Postal Inspection Service and the U.S. Department of Education, Office of Inspector General with assistance from the Surprise Police Department. The prosecution is being handled by Frederick A. Battista and Charles W. Galbraith, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER: CR-09-737-PHX-NVW
RELEASE NUMBER: 2009-232(Halton et al)

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.usdoj.gov/usao/az/


 
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Last Modified: 07/20/2009