MIDDLE DISTRICT OF FLORIDA
Former President Of Galiano Career Academy Sentenced For Theft Of Federal Funds, Obstruction Of A Federal Audit, And Aggravated Identity Theft
|FOR IMMEDIATE RELEASE||February 25, 2014|
Orlando, FL – U.S. District Judge Roy B. Dalton today sentenced Michael Gagliano (50, Sanford) to four years in federal prison for theft of government property, obstruction of a federal audit, and aggravated identity theft. As part of his sentence, the court also ordered restitution and entered a money judgment in the amount of $2,105,761.00, the proceeds of the charged criminal conduct. Gagliano pleaded guilty on August 16, 2013.
According to court documents, Galiano Career Academy, Inc. (GCA), located in Altamonte Springs, was a for-profit trade school, offering career programs such as Medical Assistant, Medical Billing and Coding, Pharmacy Technician, Travel Counselor, and Travel and Tourism Specialist. Gagliano was GCA’s President and School Director. GCA was approved by the United States Department of Education (DOE) to administer Federal Student Assistance (FSA) programs, including the Federal Family Education Loan Program (FFEL) and the Federal Pell Grant program, which offered assistance to eligible students participating in post-secondary education at eligible institutions. GCA also received financial assistance for job training from Workforce Central Florida (WCF), a permanent placement agency, that helps employers connect with central Florida job seekers.
Gagliano used Columbus Academy, a high school “diploma mill” owned and operated by his wife, to make students eligible for FSA when they otherwise would not have been qualified. The GCA students who “graduated” from Columbus Academy were not eligible to receive the federal funds since these students did not receive a real high school education. From July 2007 through July 2010, 176 ineligible students who were enrolled at GCA, through Columbus Academy, received $1,221,878.00 in Direct Student Loan funds and $715,708.00 in Pell grant funds. Additionally, GCA received federal funds from the United States Department of Labor and WCF for ineligible students who attended GCA. As a result, GCA unlawfully received $168,175.00 in funds for unqualified students.
On July 13, 2009, the DOE Office of Federal Student Aid conducted a program review of GCA. The review was conducted to assess GCA’s administration of the financial aid programs in which it participated. During the program review, Gagliano tampered with student records and placed a recording device in the auditor’s room to secretly monitor their conversations. The investigation also revealed that GCA/Gagliano electronically submitted the name and social security number of a student to the DOE in order to obtain loan funds on the student’s behalf, well after the student stopped attending GCA. Gagliano falsified the student’s attendance records to indicate that she was in attendance at GCA.
This case was investigated by U.S. Department of Education, Office of Inspector General and the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigation. It was prosecuted by Assistant United States Attorney David Haas.