OIG: Office of Inspector General
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Investigative Reports

April 26, 2000

Peggy Long
United States Attorney's Office
(718) 254-6267

Joe Valiquette
Federal Bureau of Investigation
(212) 384-2715


LORETTA E. LYNCH, United States Attorney for the Eastern District of New York, GARY MATHISON, Special Agent-in-Charge, U.S. Department of Education, Office of Inspector General, Northeast Area, and JOHN P. O'NEILL, Acting Assistant Director-in-Charge, Federal Bureau of Investigation in New York, today announced the arrest of Donna Santa, the director of the PSC - School for Careers, located at 97-77 Queens Boulevard, Rego Park, New York. Santa is charged with making false claims to the U.S. Department of Education in connection with the receipt of federal Pell grants. The amount of the fraud is estimated to be in the hundreds of thousands of dollars. Santa was arrested at her apartment in Hartsdale, New York, earlier this morning.

The arrest was made pursuant to a criminal complaint alleging that Santa instructed employees at the school to falsify student attendance records in order to maintain a flow of federal aid to the school. According to the complaint, the school is a postsecondary school training center, offering programs in computerized accounting, paralegal and medical assistance. It is directed by Project Social Care, a charitable organization providing social services to Holocaust survivors and immigrants from the former Soviet Union and Eastern Europe.

Pell grants are awarded to eligible needy postsecondary school students. The money - up to $3,125 per student per academic year - is paid directly to the educational institution to cover the student's institutional charges, such as tuition. A student's class attendance directly affects the school's authority to request and retain Pell grants for the student.

Santa allegedly directed employees to create phony make-up sheets, sometimes hundreds each week, for students with attendance problems, falsely crediting the students with having attended make-up classes that they never attended. In other cases, students were told that if they attended one hour of make-up class it would be credited as six hours of attendance, and Santa allegedly directed employees to credit students with these extra hours. The complaint quotes a student who stated that during make-up classes no formal instruction was given, instructors were only sometimes present, and students could essentially do whatever they wanted -- including reading a magazine or painting their fingernails -- so long as they did not create a disturbance.

The complaint quotes a confidential source associated with the school who stated that the school has an abnormally high graduation rate because few students are allowed to fail, and that Santa instructed teachers to change students' failing grades to passing grades. According to the same source, approximately 25% of the school's graduating students are not ready to be placed in externships due to language difficulties and lack of skills, attributable in part to frequent absenteeism.

The school has received approximately $900,000 in Pell grants since April 1999 and derives most of its income from those grants and the New York State Tuition Assistance Program ("TAP"). It is alleged that students who did not qualify for financial aid were ordinarily denied enrollment.

According to the complaint, Santa earned approximately $175,000 annually, which amount included bonuses based on the number of students enrolled, and an additional $500 per month for payments on her Mercedes Benz automobile.

In announcing today's arrest, United States Attorney LORETTA E. LYNCH stated: "Prosecuting fraud against federal programs is a priority of this Office. Every misappropriated dollar results in one less opportunity to help those in need."

This criminal investigation, which is ongoing, is being jointly conducted by the U.S. Department of Education, Office of Inspector General, and the Federal Bureau of Investigation.

Santa is charged with conspiracy and presenting fraudulent claims upon a department of the United States, charges that carry a possible sentence of up to five years in prison, $250,000 in fines and restitution.(1)

The government's case is being prosecuted by Assistant U.S. Attorney Timothy Macht. Pedigree information for the defendant is as follows:
The Defendant:

D.O.B. 3/18/47
ADDRESS: 500 Hartsdale Drive, Apt. A12
Hartsdale, New York

(1) 'The charges contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.

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Last Modified: 03/03/2005