fraudLake Havasu City, Ariz. – Student loans are usually the first step in credit establishment for college students.  Issued and guaranteed by the U.S. Department of Education, one would think that any information given to this federal agency would be protected from internal theft.  A recent internal look at staff conduct inside the department found that this was not the case.  “These students are entrusting their future to the U.S. Government when they fill out their FASFA application, yet the federal government is breaking that trust when they hire incompetent employees who use their position and taxpayer dollars for personal gain,” Supervisor Buster Johnson stated.  

The internal audit found several department employees had used student’s social security numbers provided on their Application for Federal Student Aid (FAFSA) to take out their own personal loans among other things.  “This is just another example of poor data security inside our government, and another reason why Americans don’t trust the government or government employees,” Johnson continued.

The internal staff conduct report looked all the way back to the early 2000s where it was discovered one department employee used fraudulent information over 24 times between 2006 and 2009 before finally being caught.  The report explains that the unidentified woman created a bogus Department of Education account to access the National Student Loan Data System.  She would then swap out the last four digits of her social security number with those of another.  By doing this, she was able to set up a fake identity in order to apply for credit cards, personal loans and even a Sprint cell phone account.  The unidentified lady pleaded guilty to the charges and was sentenced to 18 months in prison.  According to court documents, she only served one month in prison.

Aside from stealing students’ identities, employees with the Department of Education were also caught doing several other illegal activities while on the taxpayers’ dime.  One department employee was investigated in 2014 for using his government email to promote his own business costing the taxpayers approximately $478.36 based on the gentleman’s hourly salary.  The report also revealed that a veteran department employee from Clarkstown, Georgia, was caught accessing child pornography and had been doing it for years.  The report revealed that the gentleman was able to filter his computer activity and get around filtering software that normally prevented government staff from visiting illicit websites. 

A study done by Investor’s Business Daily (IBD) found that waste, fraud and abuse cost taxpayers a total of about $261 billion a year which is equal to about 7% of all federal spending.  “With a federal budget deficit projected at $474 billion for fiscal year 2016, maybe it’s time the federal government perform internal audits on all their departments and save taxpayers from having to pay for these fraudulent schemes,” Johnson ended.