A New Jersey woman was arrested last week for running a student loan scam that allowed her to collect nearly $200,000 in student loans from fraudulent college loan applications she submitted over a period of four years (“U.S. Attorney: Browns Mill ‘Student’ Got $192,000 in Education Loans,” The Trentonian, Aug. 11, 2010).
La’Vada Cruse, 23, has been charged in federal court with mail fraud and aggravated identity theft.
According to the complaint filed with the U.S. District Court in Camden, N.J., Cruse applied for 92 student loans between 2003 and 2007, seeking more than $1 million in student loan funds, even though, according to authorities, she completed only two college courses in three years. Cruse applied for the student loans both in her name and in the names of people whose names, Social Security numbers, and dates of birth she used without their permission.
From those loan applications, Cruse successfully obtained 17 student loans totaling $192,000. The lenders issued the student loan checks directly to Cruse or to a nominee, and Cruse deposited the money into accounts that she controlled.
Student Loan Scam Included Fake Documents and Co-Signers
In the loan applications, authorities charge, Cruse claimed to be a full-time student at any one of six New Jersey–area colleges, and many of the applications were accompanied by a falsified college enrollment letter stating that she was a student at the school.
Federal officials later learned that Cruse completed only six credit hours of classes at Burlington County College in Pemberton, N.J., between 2004 and 2006 (“Burlington County Woman Accused of Obtaining Thousands in Fraudulent Student Loans,” The Philadelphia Inquirer, Aug. 12, 2010).
Cruse’s student loan applications also included a fake co-borrower, with fraudulent biographical, employment, and financial information. Cruse falsified letters of employment and created fake pay stubs and tax forms for the ostensible co-signers in order to submit supporting documentation with her loan applications, authorities said.
U.S. Attorney and IRS Joined Investigation
The Philadelphia Inquirer reports that Cruse came under scrutiny in 2007 after police questioned her in the parking lot of a bank in Medford, N.J., where she was sitting in a silver Mercedes-Benz E320 that contained numerous applications for student loans. In the Mercedes, police also found identification in various names and illegally obtained credit cards, according to an arrest complaint.
Medford police were called to the bank after Cruse reportedly attempted several times to withdraw money from an account that had been frozen on concerns raised by bank employees.
A local investigation grew into a federal probe that involved the U.S. Attorney’s Office, the IRS, and the U.S. Postal Service.
If convicted of the mail fraud charge, Cruse faces a prison sentence of up to 30 years and up to a $1 million fine. The aggravated identity theft charge carries a mandatory minimum sentence of two years.
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