4 ms·

Can someone please explain in detail how the fraud works? The article doesn't fully explain how the is money distributed to the fraudsters. With FAFSA, the ass

Can someone please explain in detail how the fraud works? The article doesn't fully explain how the is money distributed to the fraudsters. With FAFSA, the assistance is all encapsulated away from the student- you apply for an assistance loan (requires SSN), an account is created for you, the college is hooked up directly to that account, so you never actually handle the cash. How does this specific fraud actually work?

Siira 4y ago
One obvious loophole is that there a lot of people (SSNs) who haven’t gone to a college already, so the college can just sign up people and get subsidies without those “students” ever showing up. They can pay these students, or possibly fake their documentation.
PragmaticPulp 4y ago
COVID brought a rush of emergency aid programs that weren't very well thought out. In this case, the aid targeted at students likely came through the HEERF, or Higher Education Emergency Relief Funds. Some of the programs are listed here: https://www2.ed.gov/about/offices/list/ope/crrsaa.html https://www2.ed.gov/about/offices/list/ope/crrsaa.html The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits. As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits. The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.
- ec109685 4y ago
  This article has confirmation that colleges did in fact get scammed: https://edsource.org/2021/at-these-california-community-colleges-scammers-got-their-hands-on-financial-aid/663152 https://edsource.org/2021/at-these-california-community-coll... Thanks for providing the additional details.
- sandworm101 4y ago
  >> obviously fake names like "Barack Obama" That doesn't strike me as fake. I've met Osama Bin Laden, at least one of the many people in this world with that name. There are no doubt many people called Gene Simmons who might have issues setting up accounts. James Bond was named after an author of bird books. I bet his descendants still get laughs at school. I met a junior officer once, last name "Planet". Good luck keeping a straight face on parade as they get promoted to Captain.
  - deleted 4y ago
    [deleted]
  - projektfu 4y ago
    One wonders if, Major Major style, Captain Planet will be permitted to advance to Major.
  - dehrmann 4y ago
    I had a coworker who was taking a cab back to the office. The cabbie asked for the address: 123 Main St. He thought it was fake, but not quite 123 Fake St fake.
  - ericbarrett 4y ago
    From the article, the fake names are not even remotely plausible: whole batches of students with "NA" as middle initial, sequential registration numbers, long compound words, and other obvious fakery.
- rapind 4y ago
  This is another example of why aid programs should be universal. Send every citizen a cheque for the same amount, and I mean everyone (even Bezos and Musk). One system built competently. Way lower risk of fraud or corruption (qualifiers exacerbate fraud, gatekeepers policing qualifiers create corruption). It’s not like Bezos will cash this cheque.
  - clort 4y ago
    You'd better believe he would certainly cash every cheque that comes his way. He once claimed $4000 tax credit for his children even when he wasn't entitled to, see https://www.businessinsider.com/jeff-bezos-claimed-tax-credit-for-children-propublica-2021-6?op=1&r=US&IR=T https://www.businessinsider.com/jeff-bezos-claimed-tax-credi... Of course he won't be doing anything so mundane personally, people like him will have teams whose job it is to squeeze every cent.
    - hervature 4y ago
      > he wasn't entitled to He actually was entitled to it. His earnings in 2011 were below $100,000. I'm all for keeping people honest, but let's not lie.
      - clort 4y ago
        Ooh, his "earnings" See, in 2010 he was worth $12.6 billion. In 2011 it was $18.1 billion. Then in 2012 went up to $23.2 billion. These figures apparently come from Forbes, who calculate this stuff.. see https://www.therichest.com/lifestyles/jeff-bezo-years-earned-highest/ https://www.therichest.com/lifestyles/jeff-bezo-years-earned... I guess he didn't "earn" that money though.. so would definitely have been entitled to a benefit for folk who don't earn so much? My bad...
        Spivak 4y ago
        Look, I’m all down for a wealth tax but under our current system this doesn’t count for anything. If my house doubles in value from $200k to $400k I didn’t make $200k in income in the eyes of the tax man. The fact that the criteria for the payout was just income and not a combination of income and assets is the fault of the people writing the legislation.
sjburt 4y ago
Typically you get a small amount, somewhere in the order of $500 per term, refunded directly to you for personal expenses, textbooks, etc. I think certain students may qualify for more.
aaron695 4y ago
This article is mixing multiple frauds. Mostly it's people getting free .edu email address which allows discounts on software and other things. This is most of the 65K fake students. Then there's the fraud, where students are paying people $ to take their classes to get the government $$$$ - "However, Rich soon realized that all of the work being submitted by four students was clearly being completed by an individual who wasn’t a student in the class." https://www.theepochtimes.com/mkt_breakingnews/california-community-college-overrun-with-fake-students-bots-whistleblower_4092548.html?welcomeuser=1 https://www.theepochtimes.com/mkt_breakingnews/california-co... This might be why middle names are missing. That data is unknown but the other data real. I suspect they are wrong about the third type of external fraud, but not sure. Then there's the fraud where the College gets benefits from student numbers so allows the spam.
- sshine 4y ago
  > Then there's the fraud where the College gets benefits from student numbers so allows the spam. This is how one section of the Danish educational system worked for years: Pointless, governmentally funded study programmes that don’t qualify for any kind of real-world work, but the school gets a yearly reward per student, and the students get a monthly deposit for being a student.
indymike 4y ago
There is funding other than FAFSA related grants, scholarships and aid, for instance, state budget allocations based on student enrollment.

Siira 4y ago

One obvious loophole is that there a lot of people (SSNs) who haven’t gone to a college already, so the college can just sign up people and get subsidies without those “students” ever showing up. They can pay these students, or possibly fake their documentation.

PragmaticPulp 4y ago

COVID brought a rush of emergency aid programs that weren't very well thought out. In this case, the aid targeted at students likely came through the HEERF, or Higher Education Emergency Relief Funds. Some of the programs are listed here: https://www2.ed.gov/about/offices/list/ope/crrsaa.html https://www2.ed.gov/about/offices/list/ope/crrsaa.html The reason these are ripe for fraud is that in many cases they were implemented as direct deposit transfers directly to registered students. They were implemented without checks or controls in order to get the money out ASAP, so anyone who registered as a student and entered the correct information to qualify could get one of those direct deposits. As far as I can tell, some of the implementation details depended on the college. Scammers likely tried different colleges until they discovered a system that didn't verify anything (California Junior College System) and then started filling out forms to collect the direct deposits. The fact that scammers are registering with obviously fake names like "Barack Obama" suggests that zero confirmations are being performed at all before this money is distributed.

ec109685 4y ago
This article has confirmation that colleges did in fact get scammed: https://edsource.org/2021/at-these-california-community-colleges-scammers-got-their-hands-on-financial-aid/663152 https://edsource.org/2021/at-these-california-community-coll... Thanks for providing the additional details.
sandworm101 4y ago
>> obviously fake names like "Barack Obama" That doesn't strike me as fake. I've met Osama Bin Laden, at least one of the many people in this world with that name. There are no doubt many people called Gene Simmons who might have issues setting up accounts. James Bond was named after an author of bird books. I bet his descendants still get laughs at school. I met a junior officer once, last name "Planet". Good luck keeping a straight face on parade as they get promoted to Captain.
- deleted 4y ago
  [deleted]
- projektfu 4y ago
  One wonders if, Major Major style, Captain Planet will be permitted to advance to Major.
- dehrmann 4y ago
  I had a coworker who was taking a cab back to the office. The cabbie asked for the address: 123 Main St. He thought it was fake, but not quite 123 Fake St fake.
- ericbarrett 4y ago
  From the article, the fake names are not even remotely plausible: whole batches of students with "NA" as middle initial, sequential registration numbers, long compound words, and other obvious fakery.
rapind 4y ago
This is another example of why aid programs should be universal. Send every citizen a cheque for the same amount, and I mean everyone (even Bezos and Musk). One system built competently. Way lower risk of fraud or corruption (qualifiers exacerbate fraud, gatekeepers policing qualifiers create corruption). It’s not like Bezos will cash this cheque.
- clort 4y ago
  You'd better believe he would certainly cash every cheque that comes his way. He once claimed $4000 tax credit for his children even when he wasn't entitled to, see https://www.businessinsider.com/jeff-bezos-claimed-tax-credit-for-children-propublica-2021-6?op=1&r=US&IR=T https://www.businessinsider.com/jeff-bezos-claimed-tax-credi... Of course he won't be doing anything so mundane personally, people like him will have teams whose job it is to squeeze every cent.
  - hervature 4y ago
    > he wasn't entitled to He actually was entitled to it. His earnings in 2011 were below $100,000. I'm all for keeping people honest, but let's not lie.
    - clort 4y ago
      Ooh, his "earnings" See, in 2010 he was worth $12.6 billion. In 2011 it was $18.1 billion. Then in 2012 went up to $23.2 billion. These figures apparently come from Forbes, who calculate this stuff.. see https://www.therichest.com/lifestyles/jeff-bezo-years-earned-highest/ https://www.therichest.com/lifestyles/jeff-bezo-years-earned... I guess he didn't "earn" that money though.. so would definitely have been entitled to a benefit for folk who don't earn so much? My bad...
      - Spivak 4y ago
        Look, I’m all down for a wealth tax but under our current system this doesn’t count for anything. If my house doubles in value from $200k to $400k I didn’t make $200k in income in the eyes of the tax man. The fact that the criteria for the payout was just income and not a combination of income and assets is the fault of the people writing the legislation.

sjburt 4y ago

Typically you get a small amount, somewhere in the order of $500 per term, refunded directly to you for personal expenses, textbooks, etc. I think certain students may qualify for more.

aaron695 4y ago

This article is mixing multiple frauds. Mostly it's people getting free .edu email address which allows discounts on software and other things. This is most of the 65K fake students. Then there's the fraud, where students are paying people $ to take their classes to get the government $$$$ - "However, Rich soon realized that all of the work being submitted by four students was clearly being completed by an individual who wasn’t a student in the class." https://www.theepochtimes.com/mkt_breakingnews/california-community-college-overrun-with-fake-students-bots-whistleblower_4092548.html?welcomeuser=1 https://www.theepochtimes.com/mkt_breakingnews/california-co... This might be why middle names are missing. That data is unknown but the other data real. I suspect they are wrong about the third type of external fraud, but not sure. Then there's the fraud where the College gets benefits from student numbers so allows the spam.

sshine 4y ago
> Then there's the fraud where the College gets benefits from student numbers so allows the spam. This is how one section of the Danish educational system worked for years: Pointless, governmentally funded study programmes that don’t qualify for any kind of real-world work, but the school gets a yearly reward per student, and the students get a monthly deposit for being a student.

indymike 4y ago

There is funding other than FAFSA related grants, scholarships and aid, for instance, state budget allocations based on student enrollment.