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The Justice Department announced that two California technical school executives have pleaded guilty in the largest-ever post-9/11 GI Bill fraud scheme.
“The scope of the fraud uncovered in these investigations is stunning, particularly when you consider the schemes siphoned funds intended for providing legitimate education assistance to former service members,” U.S. Attorney David H. Estes said in a DOJ press release Friday announcing the pleas.
At issue were the actions of California Technical Academy CEO Michael Bostock and Director of Student Services Eric Bostock, who the DOJ accused of defrauding the Department of Veterans Affairs of over $100 million over 10 years by falsely reporting veteran enrollment numbers, posing as veterans in phone calls with regulators and manipulating records so that it appeared veterans were completing courses.
The DOJ did not specify whether the Bostocks are related.
The two men served as school certifying officials and were responsible for working with the VA to ensure the school was in compliance with GI Bill policies. In that role, the duo misled the VA on the school’s compliance with the 85-15 rule, which states that veterans and non-veterans tuition amount and that no more that 85% of students enrolled can receive VA education benefits.
The DOJ accused the Bostocks of falsifying veteran records and linking their contact information to burner phones they purchased, with the duo using the phones to pose as veteran students when VA auditors called the numbers.
“When regulators called the falsified phone numbers to obtain information about CTA, the Bostocks and their co-conspirators would impersonate students,” the press release said.
The school received over $32 million in tuition and $72 million in “housing and other education-related benefits” as a result of the scheme, the DOJ said, claiming the alleged scheme was “the largest known incident of Post-9/11 GI Bill benefits fraud prosecuted by the department to date.”
“The Post-9/11 GI Bill was enacted to aid our military veterans and their families on behalf of a nation grateful for their service,” Assistant Attorney General Kenneth A. Polite, Jr. said in the release. “These frauds drain funds from a vital veterans’ program and undermine public faith in the administration of government. These cases demonstrate the Criminal Division’s clear commitment to protecting the integrity of federal programs and to holding offenders who would abuse and exploit these programs accountable.”