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OIG: Office of Inspector General
   Current Section

Investigation Report

THE UNITED STATES ATTORNEY'S OFFICE

EASTERN DISTRICT of CALIFORNIA


NEWS

United States Attorney Benjamin B. Wagner
Eastern District of California



Kern County Woman Pleads Guilty in Federal Student Financial Aid Fraud Scheme

FOR IMMEDIATE RELEASE


www.usdoj.gov/usao/cae
Monday, July 29, 2013

usacae.edcapress@usdoj.gov

Docket #: 1:12-cr-301 AWI

FRESNO, Calif. — Stacey Kinyada Lee, 31, of Edwards, pleaded guilty today to conspiring to defraud the United States and to commit mail fraud in a federal student aid fraud scheme, U.S. Attorney Benjamin B. Wagner announced. The other four defendants in the case have already pleaded guilty.

In her guilty plea, Lee admitted to conspiring from April 2008 to March 2012 to obtain federal student aid funds to which they were not entitled. Lee recruited individuals to act as “straw” students, including co-conspirators Deana Nolen, Willie Prude, Cheaney Key, and Erisheniqua Dixon. She enrolled them at community colleges and submitted false federal financial aid applications and other false documentation to obtain federal student assistance funds in their names, including Pell Grants and federal student loans. Lee enrolled the co-conspirators and other straw students at Barstow Community College, Cero Coso Community College, San Diego City College, and Antelope Valley College. Some of the straw students were not graduates of an accredited high school and did not have an equivalent degree such as a GED, and were therefore ineligible for federal student assistance programs.

According to court documents, Lee typically enrolled herself and others in online classes that they never intended to complete. They either obtained failing grades based on their failure to complete classwork or withdrew from classes after receiving federal financial aid. Some conspirators shared a portion of the aid with Lee as her fee, but she also obtained funds by enrolling individuals without their knowledge to apply for and obtain federal student assistance funds in their names. Through the conspiracy, Lee defrauded the U.S. Department of Education and the colleges of approximately $203,409 in federal grant and student loan funds.

“I’m proud of the work of OIG special agents and our law enforcement colleagues for shutting down yet another student aid fraud ring and holding Ms. Lee and her conspirators accountable for their criminal actions,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “OIG is committed to fighting student financial aid fraud, and we will continue to aggressively pursue those that participate in these types of crimes.”

This case is the product of an investigation by the U.S. Department of Education Office of Inspector General. Assistant U.S. Attorney Kirk Sherriff is prosecuting the case.

Lee is scheduled to be sentenced on October 7, 2013, by Senior United States District Judge Anthony W. Ishii. Lee faces a maximum sentence of five years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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Last Modified: 08/19/2013