9 Fugitives remain in group of 65 charged in $500,000 Financial and Fraud Scheme. Phoenix AZ., July 15, 2009Wanted Poster PDF (178K)

Published by the Department of Education, Office of Inspector General on 2009-07-15.

Below is a raw (and likely hideous) rendition of the original report.

OIG Investigative Reports, 9 Fugitives Remain in Group of 65 Charged in $500,000 Financial Aid Fraud Scheme
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Investigation Report
Wednesday, July 15, 2009
Office of the United States Attorney
District of Arizona
For Information Contact Public Affairs
Telephone: (602) 514-7625
Cell: (602) 525-2681
PHOENIX - Nine fugitives have yet to face charges that they were part of a scheme to defraud
the U.S. Government out of more than a half-million dollars in student loans. As of today, 54 of the
65 defendants charged in the 130-count indictment have appeared in federal court. The final two
defendants are expected to appear in court in the near future. Charges vary for each individual and
include Conspiracy, Mail Fraud, Financial Aid Fraud and/or False Statements in Connection with
Financial Aid. The lead defendant charged in all 130 counts, Trenda Lynne Halton, 37, of Peoria,
Ariz., was arrested on June 24, 2009, and was released pending trial. Trial for all defendants is set for
October 6, 2009, before U.S. District Judge Neil V. Wake. A chart with defendant information, along
with their respective charges and status, is attached.
Also attached is a wanted poster with photos of the nine fugitives. The U.S. Attorney’s Office,
U.S. Postal Inspection Service and Department of Education are asking the public’s assistance
regarding the whereabouts of nine fugitives in this case. Anyone with information regarding the
location of any of these fugitives is asked to contact Postal Inspector Greg Torbenson at 602-223-3256,
Special Agent Adam Shanedling at 562-980-4136, or call the U.S. Postal Inspection Service toll free
at 1-877-876-2455 (then select option 2.)
The June 2009 indictment alleges that from July 4, 2006, through October 30, 2007, Halton
recruited individuals to act as “straw students” in order to apply for federal financial aid, in the form
of Stafford Loans and Pell Grants, with her assistance at Rio Salado Community College. The
applicants were neither active students at Rio Salado nor did they intend to become active students.
Halton worked with four of those charged to recruit additional individuals to fraudulently apply for,
and receive, student financial aid through Rio Salado. A total of 60 additional straw students were also
charged as a result of the scheme.
The indictment alleges that during the scheme Halton maintained a system of documents and
handwritten records that contained personal information for approximately 136 straw students and
potential straw students. The extensive database included items such as dates of birth, Social Security
numbers, drivers license numbers, fictitious and valid wage tax statements, tax returns, tax transcripts,
fictitious and valid high school diplomas and Rio Salado Financial Aid applications. Halton completed
and submitted Rio Salado admission and financial aid applications containing forged and false
statements for at least 64 financial aid applicants.
Halton charged a “fee” to straw students ranging from $500 to $1,500. She also accessed Rio
Salado online classes, assuming the identity of the various straw students, in order to generate records
of the straw students’ “participation” in online classes and cause Rio Salado to authorize financial aid
payments to the straw students. During the period of the conspiracy and scheme, Halton and her 64 co-
defendants unlawfully caused federally insured loans and grants to be disbursed to unqualified straw
students totaling approximately $538,932.
A conviction for each count of Conspiracy or Financial Aid Fraud carries a maximum penalty
of five years in federal prison, a $250,000 fine or both. Each conviction for False Statements in
Connection With Financial Aid carries a maximum penalty of one year, $100,000 fine or both. Each
conviction for Mail Fraud carries a maximum penalty of 20 years, a $250,000 fine or both. In
determining an actual sentence, U.S. District Court Judge Neil V. Wake will consult the U.S.
Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound
by those guidelines in determining a sentence.
An indictment is simply the method by which a person is charged with criminal activity and
raises no inference of guilt. An individual is presumed innocent until competent evidence is presented
to a jury that establishes guilt beyond a reasonable doubt.
The investigation preceding the indictment was conducted by the U.S. Postal Inspection
Service and the U.S. Department of Education, Office of Inspector General with assistance from the
Surprise Police Department. The prosecution is being handled by Frederick A. Battista and Charles
W. Galbraith, Assistant U.S. Attorneys, District of Arizona, Phoenix.
RELEASE NUMBER: 2009-232(Halton et al)
# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.usdoj.gov/usao/az/
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Last Modified: 07/20/2009
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