The United States Attorney's office released an indictment last week that charged eight people with committing mail fraud and bank fraud at Temple University.
Between March of 1996 and February of 1998, the defendants allegedly duped Temple out of over $76,000 by writing tuition checks drawn on closed accounts or accounts with insufficient funds.
Afterwards, they allegedly sought and obtained tuition refunds from Temple before the university discovered that these checks were fraudulent.
"Basically what happened was that they would register for courses and they would overpay for the courses and then apply for a refund before the check returned," Temple Campus Safety Services Managing Director Carl Bittenbender said.
According to the indictment, the defendants successfully pulled similar scams at the DeVry Institute of Technology in Georgia an d the University of Maryland.
In each of these incidents, they allegedly enrolled at the institutions as themselves or used false names and Social Security numbers.
Grady McCrary, the alleged ringleader of this scheme, will face a maximum sentence of 365 years of imprisonment and a $15,250,000 fine if convicted. On Tuesday, McCrary was placed under electronic house arrest at his mother's home in Georgia.
In addition to being charged for mail fraud, bank fraud and using false social security numbers, McCrary has also been accused of fraudulently obtaining $22,775 in federally funded student loans and grants at Temple and the University of Maryland.
The sentences for the other seven defendants range from 115 to 165 years of imprisonment and fines of up to $7,250,000.
"The maximum sentences for each defendant are substantial," Eastern District for Pennsylvania US Attorney's Office spokesman Rich Manieri said.
Signs of the scam surfaced at Temple in 1998, when university administrators realized that a student had paid for the same course three years in a row.
After this incident was brought to the attention of the Philadelphia Police, further investigations proceeded which ultimately revealed other occurrences of students enrolling and overpaying for courses. The Federal Bureau of Investigation, the United States Department of Education and the Social Security Administration were also involved in uncovering the scam.
Currently, four of the defendants have been released from custody after posting bail.
Carlton McCrary, a fifth suspect, was already in custody for drug charges in Delaware when the indictment was released on Friday.
The police have yet to find the remaining two suspects.
According to Manieri, no trial dates have been scheduled.
In order to prevent future occurrences of mail and bank fraud, Temple administrators have implemented a new policy which gives the university fifteen days to verify student payments.
Previously, the university refunded students who had overpaid their tuition within seven business days.
"This had been the policy because many of our students... are financially challenged by going to college," Temple University Communications Director Harriet Goodheart said. "When there was an instance that the university needed to issue a refund, we always did it with the idea of meeting our students' needs."
Nevertheless, in spite of the university's need to adopt this fifteen day grace period for checks, Goodheart noted that this safeguard will put some students to a disadvantage.
"It's most unfortunate for Temple students who will now have to face a somewhat more restrictive policy that has been put into place to protect everybody's best interest," Goodheart said.
While the news of the scam surprised some administrators at Penn, the University's refund policy already requires a fifteen-day waiting period before giving refunds on checks.
"We were very concerned," Associate Vice President of Finance Frank Claus said. "When I saw the articles I reviewed our policies immediately -- I had to make sure of the fact we weren't vulnerable."
Moreover, Claus said that the bases of the administrative systems at Penn and Temple are very different.
"You don't just walk into Penn and register -- there's an admissions process that's pretty intense, so we know who we're working with," Claus said.
Nevertheless, Claus said that there is no fail-proof method of preventing scams, no matter what policies are in place.
"There are a lot of smart criminals out there and we always try to be one step ahead of them, but you never know," Claus said.Comments powered by Disqus
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