OFFICES


OIG: Office of Inspector General
   Current Section

Investigative Reports

Saginaw, Michigan
December 17, 1999

Student Loan Fraud Arrest Announced

FOR IMMEDIATE RELEASE:

Walter H. Reynolds, Supervisory special Agent, Federal Bureau of Investigation, Saginaw, Michigan, and Christopher Fox, Special Agent in Charge, Office of Inspector General, U.S. Education Department Chicago, Illinois, announced that on Friday, December 17,1999, PAULA WILSON, age 58, of 7700 Moorish Road, Bridgeport, Michigan was arrested at approximately 7:45 A.M. by Special Agents from the Office of the Inspector General, US Education Department and the Federal Bureau of Investigation, without incident.

The arrest was based on an ongoing Federal Grand Jury investigation which indicted four (4) individuals on December 15, 1999 in Bay City, Michigan. The four individuals have been indicted on a ten-count indictment for a variety of violations under Title 18, specifically Section 1001 in which the defendants were engaged in a scheme to defraud the US Department of Education of federal student loan funds. Additional counts are Sections 371, Conspiracy to Defraud the United States and Section 1344, Bank Fraud. Federal guidelines for each count are 30 years in prison and a $1 million fine.

The investigation revealed the defendants knowingly executed and attempted to execute a scheme to obtain the money and funds under the custody and control of various federally insured financial institutions by means of false and fraudulent pretenses and representations. The indictment charges that they submitted applications for federally guaranteed student loans containing false and fraudulent representations to financial institutions authorized to process loan applications for such loans. The scheme included providing false names, dates of births, social security numbers, incomes, educational backgrounds, as well as false information to obtain admission to various educational institutions. In addition, an application for a disability discharge of some of the defendants' student loans to the US Department of Education contained false representations. The losses over a six-year period, beginning in 1992, totaled more than $200,000.

PAULA WILSON and PATRICK WILSON, age 32, of Bridgeport Township, Michigan, were afforded initial appearances in front of United States Magistrate Charles E. Binder in the morning of December 17, 1999. PATRICK WILSON has been lodged at the Bay County Jail since his arrest on June 9, 1999 by US Education Department OIG and FBI agents at a Bridgeport Township address based on a Federal Complaint charging him with violation of Title 20, US Code, Section 1097 (a) which makes it a crime to obtain a federal student loan by Fraud, and Title 18, US Code, Section 1001, which makes it a crime to make material, false statements in a matter within the jurisdiction of a federal agency, among other statutes. Both PAULA WILSON and PATRICK WILSON are being detained at the Bay County Jail pending a detention hearing in the near future. The other two indicted individuals, age 28 from Austin Texas, and age 44 from Livermore, California, will be afforded an initial appearance in the near future before the US Magistrate.

This is an ongoing joint investigation by the Office of Inspector General, US Education Department, and the FBI into student loan frauds being committed throughout the Eastern District of Michigan.

The FBI would like to recognize the assistance provided by the United States Marshal Office at Bay City, Michigan and the Bridgeport Township Police Department in the arrest of PAULA WILSON.


 
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Last Modified: 03/03/2005