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U.S. Department of Justice
United States Attorney for the
Southern District of Florida


99 N.E. 4 Street
Miami, FL 33132
(305) 961-9001

PRESS RELEASE:
Florida April 29, 2003

For Information Contact Public Affairs:

Matthew Dates,
Special Counsel for Public Affairs,
(305) 961-9285

Marjorie M. Selige,
Public Affairs Specialist,
(305) 961-9048

Beauty School Owner Pleads Guilty to Embezzlement of $600,000 from the U.S. Department of Education

Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; Gary E. Mathison and Lester Fernandez, Special Agents in Charge, United States Department of Education, Office of Inspector General; and Manuel Gonzalez, Inspector in Charge, United States Postal Inspector Service, San Juan, Puerto Rico, announced today that Carlos Alvarez pled guilty before United States District Judge James Lawrence King to embezzlement of $600,000 of Pell Grant funds from the United States Department of Education, in violation of 20 U.S.C. §1097(a).

Sentencing is scheduled for July 9, 2003, at 1:30 p.m., before Judge King.

On April 18, 2000, Alvarez executed a Settlement Agreement in which he agreed to be barred for a period of seven years from having an ownership interest in any school that received United States Department of Education program funds, including Pell Grant funds. Nevertheless, within three months of executing the Settlement Agreement, Alvarez purchased Caribbean Beauty and Technical Institute (Caribtech), a for-profit school incorporated under the laws of the Commonwealth of Puerto Rico for the purpose of providing post-secondary education and training in the technical and vocational fields of cosmetology and styling. Alvarez hid his ownership of Caribtech through a straw purchaser, who falsely represented to the United States Department of Education to be the owner of Caribtech. Alvarez used the $600,000 of Pell Grant funds embezzled from the United States Department of Education for purposes unrelated to the operations of the school.

Mr. Jiménez commended the investigative efforts of the United States Department of Education, Office of Inspector General, and the United States Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Robert J. Lehner.


 
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Last Modified: 03/01/2005