Methodology of Economic crime /week 9 discussion
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Week 9: Week Nine - Class Discussion
Only 100 words
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Instructional Objectives for this activity:
Describe how public services fraud and embezzlement are related. |
Many of you have student loans. Being granted a student loan carries a responsibility similar to the responsibility of being a company employee with a position of trust, or of assuming a public position of trust.
Soon you will be confronted with the task of paying off those loans. Most of you will do so, but some will not.
- Discuss how violating this trust is committing student loan fraud. What makes it fraud?
- Describe how not paying off a student loan is similar to embezzling money from an employer or violating a public trust.
Be sure to use proper APA format in your citations of material from all sources. |
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Read the portion of Chapter 9, “Embezzlement," on pages 301-311.
· Read the portions of Chapter 10, “Public Services Fraud,” on pages 339-342 and 358-380.
In Moore v. United States, 160 U.S. 268, 269 (1895), the Supreme Court defined embezzlement in the following terms:
Embezzlement is the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come. It differs from larceny in that the original taking was lawful, or with the consent of the owner, while in larceny the felonious intent must have existed at the time of the taking.
In Moore v. U.S., the plaintiff who was a late assistant postmaster of Mobile, Alabama was indicted and convicted of embezzling money of the UNITED States totaling $ 1,652.59. There were four counts in the indictment. Upon two of the counts, two other defendants were acquitted. The fourth count, which he was convicted, charged that the said George S. Moore, being then and there an assistant, clerk, or employee in or connected with the business or operations of the United States post office in the city of Mobile, in the state of Alabama did embezzle the sum of sixteen hundred and fifty-two 59/100 dollars.
REASONS PEOPLE EMBEZZLE:
Embezzlement is a theft crime carried out by employees or others in a position of trust who know the business and exploit that knowledge for illegal gain. This type of economic crime is a crime that requires cold-blooded calculation and is often not reported to law enforcement or future employers, which allows offenders to steal again.
FINANCIAL DESPERATION/ PERSONAL GAINS:
The embezzlement process often begins with employee “borrowing” money that they intend to quickly repay. These financial demands on the embezzler continue, and eventually the employee cannot return the money. They may begin to feel as though the employer owes them or that the business would not run without the employee. Gradually an embezzling employee often continues to depend on this extra money for their ever expanding lifestyle.
Student Loan fraud:
The U.S.Department of Education guaranteed over 30billion in Federal Family Education Loan Program (FFELP) FUND IN 1998. Department regulations mandate that the owner/servicers of FFELP portfolios must meet specific due diligence requiems to a maintain the governments guarantee. These requirements include mailing letters to borrowers and making telephone contacts/attempts with them within specific time frames. The Department of Education, Office of the Inspector General (OIG) has conducted major investigations of due diligence fraud. Recently, a criminal concoction and civil settlement were obtained in the investigation if Cybernetics and Systems, Inc. loan portfolios reinsured by the federal government. As part of the resolution of this investigation, CSI paid $28 million to the United States restitution and fines in excess of $55 million have been ordered in investigations of lenders and student loan services.
Student Financial Assistance (SFA) Marketing Company / Consultant
The OIG has conducted a significant number of criminal investigations targeting individual consultants and/ or companies marketing SFA guidance and application preparation to mostly middle and upper-income students and their parents. In many instances these students because of the their incomes level, are not eligible for federal loan and grant programs. Typically, for a fee, the consultants prepare and submit to the Department false free applications for federal student aid (FAFSA) ON BEHALF OF THEIR CLINTS. TO CIRCUMVENT DETECTION OF THE FRUDULENT fafsS, THE CONSULTANTS ALSO PREPARE FALSE INCOME TAX RETURNS FOR SUBMISSION TO THE STUDENT’S SCHOOLS OD CHIOCE FOR VERIFICATION PURPOSES.
Reference
Flax, Michael M. (2005).
Economic Crimes
(Criminal Investigations Series), Law Tech Custom Publishing, Inc.
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