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Feds Bust Student Loan Ring

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(Sacramento, CA)
Tuesday, September 28, 2010

Half-a-dozen suspects are accused of taking about $200,000 in federal loans.

U.S. Attorney Benjamin Wagner is the top federal prosecutor in Sacramento. He says ring-leaders recruited people to pose as students attending American River College.

"They would sign-up for classes and apply for loans but they in fact never had any intention of using the loans to go to school. These individuals allowed the ringleaders to use their address to receiving checks and then they would simply cash the checks and split the proceeds." 

Wagner says it's the most organized student loan fraud scheme he's seen in this area for quite some time.

Two suspects have pleaded guilty. They'll be sentenced later this year…and are facing about five-years in prison.

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