OIG Investigative Reports, Memphis TN April 21, 2010 - Cosmetology School Owners Charged in Federal Court Skip to main contentAbout UsContact UsFAQs Language Assistance Englishespañol中文: 繁體版Việt-ngữ한국어TagalogРусский U.S. Department of Education Search for: Toggle navigation U.S. Department of Education Student Loans Grants Laws Data About ED OFFICES Home Reports & Resources Programs/Initiatives News Office Contacts Investigative Reports United States Attorney Lawrence J. Laurenzi Western District of Tennessee CONTACT: LEIGH ANNE JORDON PHONE: (901) 544-4231 FAX: (901) 544-4230 FOR IMMEDIATE RELEASE April 21, 2010 www.usdoj.gov/usao/tnw Charges Include Conspiracy, Wire Fraud, Embezzlement, and Obstruction of Justice Memphis, TN- Penny Burns, 43 of Memphis, and Ruby Klyce, 56 of Sardis, Mississippi have been charged in a 14 count federal indictment, announced Lawrence J. Laurenzi, United States Attorney for the Western District of Tennessee. They are charged with one count of Conspiracy to Defraud, 10 counts of Wire Fraud, one count of Embezzlement of Title IV Educational Funds, one count of Theft of Government Funds and one count of Obstruction of Justice. Burns and Klyce were the CEO and Executive Director, respectively, for HD Adcock and Associate, Inc. (HDAA), a corporation of cosmetology schools operating at nine locations between Memphis, Jackson, and Nashville, Tennessee and Charlotte, Greenville, Winston-Salem, and Durham, North Carolina. As a proprietary cosmetology school, HDAA was funded mainly through grants and loans provided, administered, or reinsured by the United States Department of Education. According to the Indictment, between June 2006 and January 2009, Burns and Klyce devised a scheme and defrauded the Department of Education approximately $464,957. Burns and Klyce allegedly were responsible for certifying hours for student attendance when students, in fact, were not in attendance and, therefore, HDAA received reimbursement funds which were not due to them. The indictment further alleges that by falsely certifying student attendance, the defendants failed to return funds to the Department of Education for students who had withdrawn or dropped out, and HDAA retained funds from Pell Grants and Title IV financial aid to which it was not entitled. In addition to falsifying attendance records, the defendants allegedly falsified GED certificates for a number of students so that those students would appear eligible for financial aid when, in fact, they were not. Count One carries a penalty of up to five years in federal prison. Counts 2-11 carry penalties of up to 20 years; Count 12 carries a penalty of up to 10 years in prison; Counts 13 and 14 carry penalties of up to five years in prison. This case was investigated by the U. S. Department of Education-Office of Inspector General, Federal Bureau of Investigation, and Internal Revenue Service Criminal Investigation. Assistant United States Attorney Justin Bailey is handling the prosecution for the government. Note: Charges brought against a person through a Complaint or an Indictment are accusations only. That person is presumed innocent until and unless proven guilty. Top Printable view Last Modified: 04/26/2010 How Do I Find... Student loans, forgiveness College accreditation No Child Left Behind FERPA FAFSA 1098-E Tax Form 2015 Budget Proposal More > Information About... Transforming Teaching Family and Community Engagement Early Learning K-12 Reforms More > Connect Facebook Twitter YouTube Email RSS Google+ More > MISUSED FOIA OIG Fraud Hotline Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. Student Loans Repaying Loans Defaulted Loans Loan Forgiveness Loan Servicers Grants & Programs Apply for Pell Grants Grants Forecast Open Grant Competitions Find Grant Programs by Eligibility Laws & Guidance No Child Left Behind FERPA Civil Rights Data & Research Education Statistics Postsecondary Education Data State Education Data Nation's Report Card What Works Clearinghouse About Us Contact Us ED Offices Jobs News FAQs Budget, Performance Notices FOIAPrivacySecurityInformation qualityInspector GeneralWhitehouse.govUSA.govBenefits.govRegulations.gov
Cosmetology School Owners Charged in Federal Court. Memphis, TN., April 21, 2010
Published by the Department of Education, Office of Inspector General on 2010-04-21.
Below is a raw (and likely hideous) rendition of the original report.