Thursday, January 14, 2010

Distance-Ed fraud

From yesterday’s Chronicle of Higher Education:

Online Scheme Highlights Fears About Distance-Education Fraud
An Arizona woman pleaded guilty on Tuesday to running an elaborate scam that highlights what federal authorities describe as the vulnerability of online education to financial-aid fraud. The scheme embroiled Rio Salado College, home to one of America's largest online programs, in a half-million-dollar con.

The defendant, 38-year-old Trenda L. Halton, blended in with the working-adult students at Rio Salado. But the neatly organized records in her suburban Phoenix home held clues to a double life. ¶ Social Security numbers. Tax returns. High-school diplomas. Ms. Halton used those records in a scheme that defrauded the federal government of about $539,000 in student-aid dollars—a scheme that involved dozens of people recruited to pose as phony "straw" students, according to court records.

But the high-tech methods she admitted using have already set off alarms at the U.S. Education Department. Ms. Halton made her bogus recruits look like real students by assuming their identities online to "participate" in classes and collect a share of their aid money, authorities say.

Confirming whether someone in an online class is a legitimate student represents a "significant challenge," says Mary Mitchelson, acting inspector general for the department. Ms. Mitchelson told Congress in October that her office had opened 29 investigations related to distance education since 2005, 19 of them in the past two years. And the number of distance-education investigations has increased since her testimony.

The targets of such digital crimes tend be community colleges, where requirements to establish financial-aid eligibility may be minimal, tuition is cheap, and distance education is booming….

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