$270 Million In Suspicious Student Aid Fraud Flagged By Treasury
Authored by Naveen Athrappully via The Epoch Times,
The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has discovered roughly $270 million in suspicious financial activity likely associated with student aid program fraud.
FinCEN issued an alert in July asking financial institutions to report suspicious activities linked to student aid fraud.
A review of submitted reports identified more than 20,000 potentially suspicious transactions since February this year. FinCEN has reported approximately $270 million in suspected fraud to federal investigators for further investigation, the Treasury said in an Oct. 19 statement.
"Federal student aid is intended to expand educational opportunities, not line the pockets of fraudsters who steal from students pursuing their education and hardworking taxpayers," Treasury Secretary Scott Bessent said in the statement.
"Treasury is working with financial institutions and law enforcement to identify these fraud schemes, recover stolen funds, and hold those responsible accountable."
The department said it was working with the White House Task Force to Eliminate Fraud, headed by Vice President JD Vance, and encouraging whistleblowers to report fraud-related information.
In an example of educational fraud, the Department of Justice (DOJ) announced last month that a Detroit man was sentenced to 92 months in federal prison for fraud schemes, including one that targeted federal student aid programs.
The man and others submitted fraudulent student aid claims for more than 1,200 individuals, collecting more than $10 million before being caught, the DOJ said. The fraud spanned 100 schools across more than 20 states.
In March, the DOJ said a former professor admitted to stealing government funds through a scam involving fraudulent student financial aid applications. More than 100 such false applications were filed across several universities and colleges in Texas.
The Treasury detailed some of the federal student aid fraud schemes in its statement. For instance, "ghost student" schemes involve criminals stealing an individual's personal information and using it to enroll as a student in classes. The victim often never realizes that a third party is collecting student aid in their name.
In "straw student" schemes, fraudsters pay real people to enroll in classes and collect financial aid in their names. In some cases, corrupt school employees may be part of these schemes.
"Student aid fraud has real consequences for students and American taxpayers. It drains finite grant resources from deserving students, potentially prevents legitimate students from enrolling in classes occupied by fraudulent enrollees, and can leave identity theft victims responsible for debts they never incurred," the Treasury said.
In July, the Department of Education held a first-of-its-kind Higher Education Fraud Summit, with participants discussing ways to tackle fraud in the sector.
"We have already prevented nearly $2 billion in attempted federal student aid fraud from going to bad actors. Every dollar lost to fraud is a dollar taken away from a student trying to build a better future," Underssecretary of Education Nicholas Kent said in a statement.
In an October 2025 update, the University of Alaska warned students to protect themselves from student aid fraud. Specifically, the university said that students should share their personal information only with trusted, secure websites.
The university recommended that students regularly monitor their credit for any unusual or new activity and report any identity theft or other suspicious activity.
"Treat digital content, like emails, texts, voicemails, and website content, with increased scrutiny, especially if the materials or resources they provide or advertise seem too good to be true or appear designed to create a sense of urgency," the university said.
Tyler Durden Tue, 10/20/2026 - 18:00
Continue reading...
[ H/T ZeroHedge ]
Authored by Naveen Athrappully via The Epoch Times,
The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has discovered roughly $270 million in suspicious financial activity likely associated with student aid program fraud.
FinCEN issued an alert in July asking financial institutions to report suspicious activities linked to student aid fraud.
A review of submitted reports identified more than 20,000 potentially suspicious transactions since February this year. FinCEN has reported approximately $270 million in suspected fraud to federal investigators for further investigation, the Treasury said in an Oct. 19 statement.
"Federal student aid is intended to expand educational opportunities, not line the pockets of fraudsters who steal from students pursuing their education and hardworking taxpayers," Treasury Secretary Scott Bessent said in the statement.
"Treasury is working with financial institutions and law enforcement to identify these fraud schemes, recover stolen funds, and hold those responsible accountable."
The department said it was working with the White House Task Force to Eliminate Fraud, headed by Vice President JD Vance, and encouraging whistleblowers to report fraud-related information.
In an example of educational fraud, the Department of Justice (DOJ) announced last month that a Detroit man was sentenced to 92 months in federal prison for fraud schemes, including one that targeted federal student aid programs.
The man and others submitted fraudulent student aid claims for more than 1,200 individuals, collecting more than $10 million before being caught, the DOJ said. The fraud spanned 100 schools across more than 20 states.
In March, the DOJ said a former professor admitted to stealing government funds through a scam involving fraudulent student financial aid applications. More than 100 such false applications were filed across several universities and colleges in Texas.
Education Aid Schemes
The Treasury detailed some of the federal student aid fraud schemes in its statement. For instance, "ghost student" schemes involve criminals stealing an individual's personal information and using it to enroll as a student in classes. The victim often never realizes that a third party is collecting student aid in their name.
In "straw student" schemes, fraudsters pay real people to enroll in classes and collect financial aid in their names. In some cases, corrupt school employees may be part of these schemes.
"Student aid fraud has real consequences for students and American taxpayers. It drains finite grant resources from deserving students, potentially prevents legitimate students from enrolling in classes occupied by fraudulent enrollees, and can leave identity theft victims responsible for debts they never incurred," the Treasury said.
In July, the Department of Education held a first-of-its-kind Higher Education Fraud Summit, with participants discussing ways to tackle fraud in the sector.
"We have already prevented nearly $2 billion in attempted federal student aid fraud from going to bad actors. Every dollar lost to fraud is a dollar taken away from a student trying to build a better future," Underssecretary of Education Nicholas Kent said in a statement.
In an October 2025 update, the University of Alaska warned students to protect themselves from student aid fraud. Specifically, the university said that students should share their personal information only with trusted, secure websites.
The university recommended that students regularly monitor their credit for any unusual or new activity and report any identity theft or other suspicious activity.
"Treat digital content, like emails, texts, voicemails, and website content, with increased scrutiny, especially if the materials or resources they provide or advertise seem too good to be true or appear designed to create a sense of urgency," the university said.
Tyler Durden Tue, 10/20/2026 - 18:00
Continue reading...
[ H/T ZeroHedge ]
