1. Fraud in Financial aid
Monday, May 23, 2016

2. presenters Andrea Cipolla Eliza Tymes Assistant Vice President,
Financial Aid Systems
University of Maryland University College (UMUC)
Director,
Office of Compliance and Fraud Prevention
University of Maryland University College (UMUC)

3. University of Maryland University College
UMUC is an online public university headquartered in Largo, Maryland.
Since 1947, UMUC’s focus has been working adults and military students.
UMUC educates more than 80,000 students. With divisions in Asia and Europe and a presence on military installations in more than 20 countries and territories, UMUC is also a leading provider of education services to the U.S military.
University of Maryland University College

4. AGENDA COMMON TYPES OF FRAUD UMUC’S STORY WARNING SIGNS
TIPS FOR COMBATING FRAUD

5. Common types of fraud

6. Common Types of Fraud Underreporting of income and assets
Overstating the number of family members in college
Provide a falsified copy of documents
Fabricate prior education
Squandering financial aid on luxury items
“Pell runners” / “Pell chasers”
Applicants can score larger award amounts by underreporting their income or filing status
Tax documents – much bigger issue before the DRT and IRS transcripts; We had a student who submitted a forged Fire report for a PJ
Students who never earned a HS diploma or GEG
Vacations, boats, car, other items unrelated to student learning
Students who enroll with no intention of finishing the classes; withdraw after 60% mark;– hard to prosecute because of the difficulty to prove intent. UEH was created to help monitor this problem.

7. Common Types of Fraud Fraud Rings
Ring leaders get access to peoples personal information – data breach OR
Target elderly, poverty stricken or unknowing individuals
Use the same computer to apply for admissions, financial aid, or register for classes
Average ring involves 19 individuals
ED and OIG issued a Dear Colleague letter “urgent call to action” in 2011 – types we’ve seen – ring leader gets access to peoples PII

8. Umuc’s story

9. Umuc’s story
In the fall of 2011, the Financial Aid Office made a shocking and accidental discovery of two fraud rings…… A staff member realized tax returns for multiple students were being submitted from the same fax number.

10. UMUC’s story FA OIG UMUC Flagged suspicious students
Selected suspicious students for institutional verification
OIG
Immediately reported individuals; paper trail
Assisted with identification, prosecution and dismantling of fraud rings nationwide.
UMUC
Multiple department commitment
2013 created a dedicated team; Office of Compliance and Fraud Prevention
FA – “Students Of Interest” (SOI) – all verification docs; photo IDs; conflicting information
OIG – 13 boxes of documentation in that initial discovery.
UMUC – admissions / student records/student accounts/ financial aid / legal office; “fraud squad” – 4 member department

11. UMUC’s story
We’ve reported almost 9000 students to Office of Inspector General

12. Illustration of SOI activity as indicated by mapping the IP address tied to the admissions application. The data is based on number of applications generated 06/01/2013 thru 06/13/2014.

13. Illustration of SOI activity as indicated by mapping the address listed on the admissions application. The data is based on number of applications generated since 06/01/2013 thru 06/13/2014.

14. WARNING SIGNS
Red flags or things to look for

15. Look for the following warning signs
Round numbers reported for income - .
No business or farm income reported when occupation suggests they are self-employed.
Interest and dividend income both $0, or very low, compared with the family's wages.
Documents look like photocopies of photocopies.
Documents with different fonts / whiteout.
Like 10,000; 5,000
If the return reports one half of self employment tax or self employed health insurance deduction but not business or farm income be suspicious.
Compare with figures reported for capital gains or losses.

16. Look for the following warning signs
Straw students – Same information for multiple students
IP Address
Demographic information – address, telephone number, address
Reported Identity Theft

17. Tips for combating Fraud

18. Tips for combating Fraud
Ask for proof of legal separation or divorce decree
Require proof of registration and/or copy of paid tuition for parents who claim to be in college
Establish policies requiring expulsion of students who participate in fraudulent activities
Track suspected cases of fraud from year to year
1 Also ask for proof of street address for each person (parents or student / spouse)

19. Tips for combating Fraud
Report cases of fraud to the Inspector General at the US Department of Education by calling MIS-USED
Remember that some cases of apparent fraud may be genuine errors
Create a cross-department team that encourages offices to communicate with one another about suspicious activities 1

20. Just because

21. Just because

22. Questions?

23. presenters Andrea Cipolla Eliza Tymes Assistant Vice President,
Financial Aid Systems
University of Maryland University College (UMUC)
Director,
Office of Compliance and Fraud Prevention
University of Maryland University College (UMUC)

24. THANK YOU!