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Woman Pleads Guilty in Webster University Fraud Case

The woman used South Carolina inmates' personal information for financial aid applications.

A South Carolina woman pleaded guilty Monday after she filed fraudulent applications with and illegally spent more than $120,000 in student aid, according to the United States Attorney's Office.

Michelle N. Owens, 35, was an inmate at Leath Correctional Institute in Greenwood, SC, from December 2007 to September 2008. She worked in the prison's Education Department while there and had access to inmates' personal information, according to a news release.

She then used that information to submit 23 different applications to Webster University's distance learning program. She also applied for $467,500 in federal student loans.

On Monday, she pleaded guilty to one count of federal student financial aid fraud and one felony count of mail fraud.

In September 2009, a Webster University employee discovered several suspicious addresses in the student application process and reported them to her manager, according to Susan Kerth, media relations officer for Webster University.

The University initiated a formal investigation and discovered a highly unusual set of circumstances that indicated a possible scheme to defraud the federal student loan program.

“We immediately reported it to the appropriate federal authorities and cooperated fully with the federal investigation,” Kerth said. “Webster University was a victim of this fraud.”

The FBI, Postal Inspection Service and the Department of Education investigated the case.

Owens hasn't been sentenced yet, but the first crime carries a maximum penalty of five years in prison and/or a fine up to $20,000. The penalty for mail fraud is much higher. That charge carries a maximum sentence of 20 years in prison and/or a fine up to $250,000.

To safeguard against this type of fraud in the future, the University reviewed its policies and promptly instituted measures to ensure this does not happen again, Kerth said.

Kirkwood-Webster Groves Patch editor Owen Skoler contributed to this report.

Christopher Reilly June 09, 2011 at 06:46 AM
Good job by the prison officials in South Carolina for giving a convicted forger access to prisoners private information and a computer hooked up to the Internet.

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