An Oakland couple is under investigation for defrauding SF State out of at least $11,500 in financial aid, according to Mike Aden, a senior special investigator for the California Student Aid Commission.
A woman who goes by the name of Princess Pope is suspected of illegally obtaining at least $40,000 in student loans and grants from Bay Area schools, Aden said.
Her husband, Ray Pope, is suspected of illegally obtaining at least $25,000 in financial aid from East Bay schools, according to Aden.
"This is probably the biggest individual case I've seen in a while," Aden said.
According to Aden, Princess Pope received a $4,000 Stafford Loan when she was enrolled at SF State from 1988 to 1989 under the name of Denise Hunt. Hunt is Pope's legal name, but Aden said, she is probably not entitled to that money since her income was too high.
Pope also received a total of $5,500 in Stafford Loan funds and $1,000 in Pell Grant, Supplemental Educational Opportunity Grant and Perkins Loan funds using the name Crystal Carter while she was enrolled at SF State from 1989 to 1990.
Ray Pope also received financial aid funds around the same time using his real name and a different Social Security number, Aden said. He couldn't reveal the exact amount of money Ray Pope received since the case against him is still under investigation.
"They were pretty sophisticated. Not everyone is that sophisticated," Ray Brown, a supervising special investigator for the California Student Aid Commission said about the Popes' method of obtaining financial aid funds.
By being able to obtain Social Security cards and driver's licenses in different names and by falsifying tax forms, Princess Pope was able to back up her claim for financial aid at SF State and other schools, Aden said.
While the Popes may be an extreme example of individuals defrauding financial aid funds, it is a problem affecting both state and federal aid programs.
California guarantees $2.5 billion a year in student loans. Brown said the amount of fraud varies because it is impossible to catch everyone, but he estimates 2 percent to 3 percent a year is lost to fraud.
"You're dealing with a financial aid program that has been oriented to certain things. This program was designed that everybody is honest, so legitimate students can get their education and get their money," Brown said.
The U.S. Department of Education estimates that nearly $3 billion is lost to loan defaults, waste and fraud every year. In 1993, the federal government spent $24 billion on financial aid for higher education.
Thomas Rutter, director of financial aid at SF State, said that applications go through a series of checks to verify accuracy. Each year, SF State randomly audits between 30 percent to 40 percent of students' applications in a process similar to the Internal Revenue Service. The California Student Aid Commission and a federal contractor also conduct a series of checks before guaranteeing funds to students.
SF State gave out more than $50 million in financial aid last year and approximately $28 million of that was in guaranteed student loans, Rutter said. Next year, between 11,000 and 12,000 SF State students will receive financial aid, he said.
About 86 percent of SF State students that receive financial aid loans are paying them back, Rutter said. Approximately 14 percent aren't paying them back, but he said it isn't usually due to fraud. Instead, graduating students are unable to find work or haven't completed their education. He stressed the majority of students receiving aid legitimately need it.
But abuse does occur and is hard to detect because of a lack of manpower.
The California Student Aid Commission investigates approximately 300 cases of fraud a year, Brown said, but that figure would be higher if there were more investigators.
"We only have nine investigators for the whole state of California," he said. While he said individual fraud is 10 times greater than institutional fraud, institutional cases usually involve much larger amounts of money.
And abuse in the system affects students who have a legitimate need for money, Brown said.
"There's only a certain amount of money to go around," he said.
"We only have a certain amount of money allocated for the grant program and if some of it is being given to students who don't need it, legitimate students are losing out and it hurts the whole program."
The Popes have yet to be charged with any crimes in San Francisco, but Princess Pope was arrested and charged in early March on 113 counts of welfare fraud, forgery, perjury and grand theft in Alameda County.
County prosecutors allege she fraudulently received more than $200,000 in welfare, student loans and federal housing aid there.
Her husband was also arrested on five counts for the same offenses as his wife's for allegedly receiving almost $50,000 fraudulently in Social Security payments and in student loans.
Princess Pope is also awaiting trial in Alameda County Superior Court on charges that she fraudulently received $81,000 in Aid to Families With Dependent Children funds and food stamps from 1986 to 1992. She pled not guilty in that case.
Ray Pope was released from Alameda County jail on bail last week. Princess Pope was expected to attend a bail hearing on Wednesday.
A trial date should be set before May 12, according to the Alameda County district attorney's office.