South Carolina woman pleads guilty to defrauding Webster University

Wednesday, June 8, 2011 | 4:41 p.m. CDT

ST. LOUIS — A former South Carolina inmate has pleaded guilty to federal fraud charges for using the identities of 23 fellow prisoners to collect thousands of dollars of student financial aid through a Missouri university.

The U.S. attorney's office in St. Louis said Wednesday that Michelle Owens submitted fraudulent admission applications to Webster University by using the personal information she gleaned from other inmates at Leath Correctional Institution in South Carolina. Prosecutors said Owens sought $467,500 in federally backed student loans, using nearly $125,000 of that for personal expenses.

The federal attorney's office said Owens, 35, pleaded guilty in her hometown of Florence, S.C., on Monday to one count each of mail fraud and federal student financial aid fraud.

According to a document detailing the plea agreement, Owens gained access to inmates' personal information — including their social security numbers and birthdates — while serving a forgery sentence in the prison from December 2007 to September 2008. Owens, also known as Michelle Salters-Owens, worked in the prison's education department as an inmate and submitted the fraudulent education documents from around the time of her arrival in prison through October 2009, according to the plea document.

The plea agreement said the other inmates did not know Owens was submitting college applications and financial aid requests on their behalf and had no intention of taking online courses through Webster University, which is based in the St. Louis suburb of Webster Groves. One of the inmates whose identity Owens used recently had been sent to the prison on a 20-year sentence for kidnapping. None of the other inmates were identified in the court document.

After the student financial aid was paid to the university, any amounts in excess of tuition and fees were deposited on electronic debit cards to be used by the students for education expenses such as books, supplies and housing. Owens then made cash withdrawals or expenses totaling $124,821 from those student debit cards, the plea agreement said.

Student financial aid fraud carries a maximum penalty of five years in prison and fines up to $20,000. Mail fraud has a maximum penalty of 20 years in prison and fines up to $250,000.

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