oversight

Moler Beauty College Corporation along with Owners and Employees Sentenced for Federal Fraud Violations. New Orleans, LA, April 12, 2006

Published by the Department of Education, Office of Inspector General on 2006-04-12.

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

OIG Investigative Reports, Moler Beauty College Corporation Along with Owners and Employees Sentenced for Federal Fraud Violations
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Investigative Report
For Immediate Release:
April 12, 2006
New releases can be found at our website at www.usdoj.gov/usao/lae.
United States Department of Justice
U. S. Attorney, Eastern District of Louisiana  Jim
Letten
United States Attorney
500 Poydras Street, Suite B210
New Orleans, Louisiana 70130
Contact:
Kathy English (504) 680-3068
MOLER BEAUTY COLLEGE CORPORATION ALONG WITH OWNERS AND EMPLOYEES SENTENCED
FOR FEDERAL FRAUD VIOLATIONS
NEW ORLEANS, LOUISIANA - Jim Letten, United States Attorney for the
Eastern District of Louisiana, announced that a Louisiana corporation, along
with owners and employees have been sentenced for conspiracy to commit fraud
against the United States Department of Education. According to a recently unsealed
indictment returned on January 27, 2005, MOLER BEAUTY COLLEGE, INCORPORATED,
DALE KOEHL, 51, of Metairie, LA, TIM KOEHL, 48, of Metairie, LA, CLARENCE
KOEHL, 84, Metairie, LA, MICHELLE HARDY, 34, of Arabi, LA, and ALLISON
SMITH, 45, of Hammond, LA were charged in an one count indictment with conspiring
to steal Title IV Higher Education funds from the U. S. Department of Education.
"The defendants employed a number of schemes and artifices to defraud the Government
of monies they were not entitled to," explained U. S. Attorney Letten. He added,
"The defendants, along with the corporation, administered admission
tests to students when they were not qualified to administer those tests;
an independent test administrator certified tests as complying with the
Department of Education standards when in fact those tests were not proctored
by independent test administrators; employees and owners had failing tests
scores of prospective students changed in order to qualify for federal
funding; students that had dropped out of MOLER college program were maintained
on school records that were submitted to the Department of Education in
order to avoid refunding monies owed.
This crime affects all students that depend upon the resources of the
Department of Education to reach their higher educational goals. What
the defendants did in this case is unconscionable because they actually
took education resources out of the pockets of those who need it and earned
the right to receive Pell Grants and other funding resources."
According to the indictment and the factual basis filed with the United States
District Court, the conspiracy began in January, 2002 and resulted in a loss
of more than $200,000 of Title IV Higher Education funds, namely in the form
of Pell Grants and Federal Supplemental Education Opportunity Grants (FSEOG).
United States District Judge Kurt Engelhardt sentenced the MOLER BEAUTY COLLEGE
(MBC) to five (5) years probation and a $400 special assessment. DALE
KOEHL was sentenced to serve eighteen (18) months imprisonment, two (2)
years supervised release and a special assessment of $100; TIM KOEHL
was sentenced to serve twenty-seven (27) months imprisonment, two (2) years
supervised release and a special assessment of $100; and CLARENCE KOEHL
was sentenced to serve twelve (12) months and one day imprisonment, two (2)
years supervised release and a special assessment of $100. Judge Engelhardt
also ordered that the defendants pay $164,700 in restitution, which the defendants
have already paid.
Further, On June 15, 2005, defendants ALLISON SMITH and MICHELLE
HARDY both pled guilty to Misprision of a Felony. Judge Engelhardt sentenced
both SMITH and HARDY to two (2) years probation for their participation
in their role in the criminal activity surrounding the fraud against the Department
of Education.
The four year investigation was conducted by Special Agent Patricia Gonzalez
of the Federal Bureau of Investigation and Special Agent Christopher Cooper
of the United States Department of Education Inspector General Office. The case
was prosecuted by Assistant United States Attorneys Abram McGull, II, Michael
Simpson and Albert J. Winters, Jr.
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Last Modified: 04/17/2006
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