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Man convicted of defrauding federal student aid program

BATON ROUGE, La. (AP) — A Louisiana man who funneled students’ financial aid funds to his own bank accounts and falsified business records to get a COVID-19 relief loan has been convicted on several counts of fraud and money laundering.

Elliot Sterling, a 33-year-old from Baton Rouge, was unanimously convicted by a federal jury after an eight-day trial, U.S. Attorney Ronald C. Gathe Jr. said Tuesday in a news release.

The charges included five counts of wire fraud connected with a scheme to take money from the Department of Education federal student aid program and another two counts related to defrauding a Small Business Administration loan program designed to help businesses during the pandemic.

Sterling was also convicted of six counts of money laundering involving the proceeds of the two wire fraud plans, as well as two counts of financial aid fraud. The jury ordered him to forfeit about $422,600 in proceeds that the FBI seized.

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Gathe said Sterling faces a maximum of 20 years in federal prison for each wire fraud count, 10 years per money laundering count and five years per financial aid fraud account on top of fines, restitution and supervised release.

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Trial evidence showed he received about $1.4 million in student aid loans and grants associated with 180 Baton Rouge Community College students to his personal and business bank accounts.

Sterling used the personal identifying information of these supposed students to fill out financial aid applications and enroll them in classes, according to the news release. He also controlled bank accounts for the loans and directed the Department of Education money to himself.

He pretended to be the students when signing in with their credentials. They didn’t typically have access to the email addresses or login information created for their financial aid, school or bank accounts. Most weren’t aware that they signed up for loans or that he signed master promissory notes in their names obligating them to repay the full amount.

Sterling also faked academic qualifications for 168 students, 145 of whom didn’t even have a high school diploma or equivalent. Gathe said some students were incarcerated when their applications were submitted, promissory notes were signed or aid was dispersed.

A witness testified during the trial that Sterling paid him $5,000 to make 42 diplomas with fictional grades. None of the 180 students progressed academically at the college, and 172 of them failed or withdrew from every class.

Sterling kept over 60% of the funds for himself, according to the news release. For 25 students, he kept 100% of the loan proceeds.

In terms of the Small Business Administration, Sterling falsified his educational consulting business’ revenues and costs — and didn’t disclose a previous guilty plea to felony theft — in a loan application.

The agency lent him $90,000 to pay for operating costs during the pandemic, and he quickly withdrew $75,000 in cash. Gathe said Sterling spent more than $253,000 at casinos in Louisiana, Pennsylvania and Nevada during his schemes.

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