oversight

Manhattan U.S. Attorney Charges Beauty School Owner and Six Others With Conspiring to Fraudulently Obtain Federal Financial Aid . New York, NY., April 21, 2011

Published by the Department of Education, Office of Inspector General on 2011-04-21.

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

OIG Investigative Reports, New York, NY., April 21, 2011 -  Manhattan U.S. Attorney Charges Beauty School Owner and Six  Others With Conspiring to Fraudulently Obtain Federal Financial Aid
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United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE
APRIL 21, 2011
CONTACT:    U.S. ATTORNEY’S OFFICE
ELLEN DAVIS, CARLY SULLIVAN,
JERIKA RICHARDSON, EDELI RIVERA
PUBLIC INFORMATION OFFICE
(212) 637-2600
ED-OIG
CATHERINE GRANT
(202) 245-7023
MANHATTAN U.S. ATTORNEY CHARGES BEAUTY SCHOOL OWNER AND SIX OTHERS WITH CONSPIRING TO FRAUDULENTLY OBTAIN
FEDERAL FINANCIAL AID
PREET BHARARA, the United States Attorney for the
Southern District of New York, BRIAN HICKEY, the Special Agent-in-Charge
of the Northeast Region of the U.S. Department of
Education, Office of the Inspector General ("ED-OIG"), and ROBERT
L. PANELLA, the Special Agent-in-Charge of the U.S. Department of
Labor, Office of Labor Racketeering and Fraud Investigations,
announced that SIU PING YUEN, owner of the USA Beauty School
International, Inc. ("USAB"), and DOMINICK YUEN BONOMOLO, the
Financial Aid Director of USAB, were arrested today, along with
five other USAB employees, for conspiring to fraudulently obtain
federal Pell Grant funds.
Manhattan U.S. Attorney PREET BHARARA said: "As alleged
in the Complaint, there is an ugly side to USA Beauty School, one
that involves a systematic pattern of deception and fraud. These
defendants allegedly used false records and phony diplomas to
fraudulently obtain Pell Grant funds, taking them from students
and schools that were more deserving. This type of fraud is
unacceptable, and we will continue to work with our law
enforcement partners to put a stop to it."
Special Agent-in-Charge for the Northeastern Region of
the U.S. ED-OIG BRIAN HICKEY said: "Today’s action alleges that
the defendants defrauded taxpayers in a deliberate, methodical,
and exhaustive way. I am proud of the work of OIG’s Special
Agents for their pursuit of these individuals."
According to the Complaint filed in Manhattan federal
court:
The Federal Pell Grant Program, administered and funded
by the U.S. Department of Education, provides financial aid to
eligible, low-income, post-high school students to assist with
post-secondary education costs. The grants are paid by the
Department of Education to the educational institution, which
then provides credits to the enrolled student to cover charges,
such as tuition. To participate in the Program, institutions
must enter into a Program Participation Agreement with the
Department of Education.
USAB, which provides cosmetology courses, is located in
the Chinatown section of Manhattan. From August 2006 through
December 2010, YUEN, BONOMOLO, and defendants MEI TAM CHUN, KERRY
HUANG, QUI YING MEI, AWILDA MENESES, and WEI MING CHEN allegedly
obtained Pell Grant funds through various fraudulent devices.
Among other things, the scheme involved creating fictitious high
school diplomas in an effort to make otherwise ineligible
students appear eligible for grants, forging federal financial
aid applications so that USAB could obtain grants for which they
were not entitled, and creating false attendance records in which
students were marked present when, in reality, the students were
absent from school. In certain instances, attendance records
were created for periods in the future. Since June 2006, the
Department of Education provided more than four million dollars
in Pell Grants to the school.
* * *
YUEN, BONOMOLO and CHUN are each charged with one count
of Pell Grant fraud and one count of conspiracy to commit Pell
Grant fraud. Each faces a maximum penalty of ten years in prison
and fines of $270,000 or twice the gross gain or loss from the
offenses. The remaining defendants are each charged with one
count of conspiracy to commit Pell Grant Fraud and face a maximum
penalty of five years in prison and a fine of $250,000 or twice
the gross gain or loss from the offenses.
Mr. BHARARA praised the investigative efforts of the
U.S. ED-OIG and the U.S. Department of Labor, Office of Labor
Racketeering and Fraud Investigations.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S.
Attorney MARTIN S. BELL is in charge of the prosecution.
The charges contained in the Complaint are merely
accusations, and the defendants are presumed innocent unless and
until proven guilty.
11-105
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