LOS ANGELES – Three women were arrested this week on a federal grand jury indictment alleging they ran a federal student aid fraud scheme that used the identities of California prison inmates and other victims to fraudulently enroll in an Orange County-based community college and obtain federal student loans totaling nearly $1 million, the Justice Department announced today.
The six-count indictment charges the following defendants with one count of conspiracy to commit wire fraud affecting a financial institution and bank fraud:
- Nyisha Ramsey, 43, of Lancaster;
- Dionne Ramsey, 36, of Las Vegas, who is Nyisha Ramsey’s sister; and
- Sharyn Barney, 62, of Lancaster, who is Nyisha Ramsey’s mother-in-law.
Dionne Ramsey faces four additional counts of wire fraud affecting a financial institution. Dionne Ramsey and Barney also have been charged with one count of bank fraud.
According to the indictment returned in December 2022 and unsealed this week, from January 2012 to August 2017, the defendants allegedly obtained personally identifying information, including names and Social Security numbers, of state prison inmates and other victims, and used this information to fraudulently enroll in community colleges.
The defendants allegedly then posed as the straw students to apply for federal student aid using the Free Application for Federal Student Aid (FAFSA) and directed those funds to bank accounts they controlled. Those funds, according to the indictment, were used for personal expenses and were not used for permitted educational costs at a community college in Orange County as they were supposed to be.
As a result of their alleged scheme, the defendants fraudulently caused the United States Treasury to disburse approximately $980,000 in FSA funds on behalf of straw students.
The United States Department of Education oversees the administration of Title IV Federal Student Assistance. This includes the administration of Direct Loan Programs for low-interest loans to eligible students to help cover the cost of higher education, and the Pell Grant Program to assist eligible needy students in meeting the costs of post-secondary education. According to federal regulations, federal student-loan funds can only be used to pay the cost of attending an institution of higher education. Incarcerated individuals are not eligible to receive such funds.
All three defendants were arrested this week and were ordered released on bond. Nyisha Ramsey and Barney were arraigned and have pleaded not guilty to the charges against them. An April 25 trial date has been scheduled for them. Dionne Ramsey, who made her initial court appearance on Thursday in the District of Nevada, is expected to be arraigned in Los Angeles in the coming weeks.
To read the indictment click here.