oversight

Two Men Arrested on Charges to Defraud Federal Government of Financial Aid Funds. San Francisco, CA, September 27, 2004

Published by the Department of Education, Office of Inspector General on 2004-09-27.

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

OIG Investigative Reports, Two Men Arrested on Charges to Defraud Federal Government of Financial Aid Funds
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FOR IMMEDIATE RELEASE:
September 27, 2004
U.S. Department of Justice
United States Attorney
Northern District of California
11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California  94102
Tel: (415) 436-7200
Fax: (415) 436-7234
Two Men Arrested on Charges to Defraud Federal Government of Financial Aid Funds
Serge Ivanov, 45, of Beverly Hills, California and Michael Solovey, 39, of Buffalo, New York were arrested today on 16 counts of conspiracy, financial aid fraud, mail fraud, and money laundering, the United States Attorney's Office for the Northern District of California announced today.
According to the indictment, the defendants are alleged to have defrauded the federal government of hundreds of thousands of dollars in financial aid by submitting fraudulent student applications based on financial information obtained from former and current students.  As part of the scheme, the defendants allegedly misrepresented to the Department of Education that the students applying for financial aid were students enrolled in an ultrasound course. Mr. Ivanov, who was part owner of the California School of Medical Sciences, had previously been authorized to receive federal financial aid, in the form of grants and loans, for students enrolled in an ultrasound course at his school's Beverly Hills location.  Mr. Ivanov and Mr. Solovey allegedly conspired to have Solovey submit to Ivanov financial aid applications from students taking computer courses at Solovey's Software Training Center in San Francisco.  The students were unaware that their financial information was used to obtain federal funds for a purported ultrasound course that they never took.  To promote the fraud, defendants allegedly manufactured and forged student signatures on forms such as student attendance records, course evaluation sheet, and even created report cards showing that these students had enrolled in and completed an ultrasound course, when they never had.  It is alleged that Mr. Ivanov defrauded the federal government of nearly $1.7 million dollars as part of a greater scheme to defraud the federal government of financial aid funds.
The maximum statutory penalty for each count in violation of 18 U.S.C. §
1956(a)(1)(A)(i) – money laundering – is 20 years and a fine of $500,000
or twice the value of the monies laundered; for 18 U.S.C. § 1341 – mail fraud
– it is 20 years and a $250,000 fine; for 20 U.S.C. § 1097(a) – financial aid
fraud – it is 5 years and a $20,000 fine and for 18 U.S.C. § 371 – conspiracy
– it is 5 years and a $250,000 fine, plus restitution if it is appropriate. However,
any sentence following conviction would be dictated by the Federal Sentencing
Guidelines, which take into account a number of factors, and would be imposed
in the discretion of the Court. An indictment simply contains allegations against
an individual and, as with all defendants, Mr. Ivanov and Mr. Solovey must be
presumed innocent unless and until convicted.
Mr. Solovey was arrested in Buffalo, New York this morning and made his initial appearance in federal court in Buffalo, New York.  Bail has yet to be determined.  Mr. Ivanov was arrested this morning in Beverly Hills and had an initial appearance this afternoon.  Bail was set at $50,000.
The prosecution is the result of a 3 year investigation by agents of the Department of Education's Office of Inspector General; the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.  Stacey Geis is the Assistant U.S. Attorney who is prosecuting the case.
A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.  Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.
All press inquiries to the U.S. Attorney's Office should be directed to Luke Macaulay at (415) 436-6757.
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Last Modified: 02/28/2005
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