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|FOR IMMEDIATE RELEASE
||Friday, March 25, 2016|
Two Metro Denver Residents Sentenced to Prison for Defrauding Department of Education Student Loan Program
The two defendants used 27 different identities to obtain money meant for college but taken for personal use, including gambling
DENVER – A Metro Denver couple, Raquel A. Espinoza, age 37, and George F. Durbin, age 55, were both sentenced to federal prison by Senior U.S. District Court Judge Wiley Y. Daniel for their involvement in defrauding the U.S. Department of Education student loan program, the Colorado U.S. Attorney’s Office, the U.S. Department of Education, Office of the Inspector General and the U.S. Postal Inspector in Charge in Denver announced. In addition to the federal prison sentence, both defendants were ordered to pay restitution to the Department of Education, the State of Colorado, and various Denver metro area community colleges. They were remanded into custody at the conclusion of the sentencing hearings.
Espinoza and Durbin both pled guilty to one count of mail fraud and one count of aggravated identity theft. Espinoza was sentenced to serve 54 months in federal prison, followed by 3 years of supervised release. She was also ordered to pay restitution to the U.S. Government totaling $262,853.72. Durbin was sentenced to serve 45 months in federal prison, followed by 3 years of supervised release. He was ordered to pay restitution to the U.S. Government totaling $183,806.45. The two defendants are to pay portions of their restitution jointly and severally.
Both defendants were indicted by a federal grand jury on October 22, 2104. Espinoza pled guilty on December 17, 2015. Durbin pled guilty on December 1, 2015. They were both sentenced on March 10, 2016.
According to the stipulated facts contained in both defendants’ plea agreements, defendants Durbin and Espinoza lived together when they concocted a scheme where they would apply for financial aid and enroll in colleges—with no intent to attend—and pocket the financial aid money. As part of the scheme, they enrolled and applied for money not only in their own names, but also in the names of both witting and unwitting third parties. Defendants Espinoza and Durbin applied for and received financial aid under at least twenty-seven different identities, including their own. All of the identities used were the actual identities of friends, acquaintances, family members, or other known persons. In most cases, Defendant Espinoza would present herself as able to assist others in signing up to attend college. She would obtain identifying information from the potential students and promise to obtain financial aid and college enrollment for the person. In return, she or Durbin asked for a portion of the financial aid funds as a fee. Espinoza frequently told persons without a GED or high school diploma that she could still get them enrolled.
Some of the enrollees were in on the scam—they received their money, minus the fee, but never attended classes. Other applicants, however, including applicants connected to Durbin, never heard back from the defendants and were not privy to the scheme. There were also a few instances where Defendants obtained personal information surreptitiously and enrolled people without any cooperation from the victim.
Defendants would fill out online forms in the names of these people, where they would lie or make up information about the applicant’s income, assets, and diploma/GED status. They would also enroll these people at community colleges in the Denver metro area: Arapahoe Community College, Community College of Aurora, Community College of Denver, Front Range Community College, and Red Rocks Community College. When the person was enrolled and approved for financial aid, the Department of Education would disburse financial aid funds to the college in the student’s name. A small amount of financial aid also sometimes came from the State of Colorado. The college would apply the funds to the outstanding balance on the student’s school account -- which generally constituted tuition and fees for the semester. Then, after attendance was verified, the money would be deposited into an account in the student’s name at Higher One, a company with which the community colleges contracted to help manage the distribution of financial aid funds to students.
Once a Higher One account was created, the defendants would access that account, directing the Higher One debit cards to mailing addresses they controlled. To obscure their activities, the two defendants used a combination of various contact information, including at least five different mailing addresses, eleven different phone numbers, and ten different e-mail addresses. Accessing the Higher One account generally required defendants to confirm their identity, which they were usually able to do using the personally identifiable information they had obtained.
Once the defendants received the debit cards or cashed the checks, they would spend the money for their own personal uses. This included, among other things, significant spending at casinos in Colorado—Defendants’ activities resulted in over $22,000 in financial aid funds being spent on gambling and associated fees.
“The defendants not only victimized government college financial aid programs, but victimized students and others by hijacking their personal information and identities to steal financial aid funds,” said U.S. Attorney John Walsh. “Thanks to a team of investigators, the defendants’ scheme to defraud the government, the State, schools and other victims was uncovered, and now they sit in prison as a consequence to their actions.”
“I'm proud of the work of OIG special agents, our law enforcement partners, and the U.S. Attorneys' Office for shutting down this fraud ring and holding Raquel Espinoza and George Durbin and their coconspirators 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 who participate in these types of crimes.”
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. Mail to perpetrate fraud schemes.” said Craig Goldberg, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of the hard work put into this case and our quality law enforcement relationships with the U.S. Department of Education and the Colorado U.S. Attorney’s Office.”
This case was investigated by the U.S. Department of Education, Office of the Inspector General, the United States Postal Inspection Service and the United States Secret Service.
The defendants were prosecuted by Assistant U.S. Attorney Matthew Kirsch, Chief of the U.S. Attorney’s Office Criminal Division, and Special Assistant U.S. Attorney Daniel Burrows.
Securities, Commodities, & Investment Fraud
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