Theology college charged in alleged $12 million scheme involving fake students and ‘free’ money

A federal indictment alleges that a private theology college based in North Carolina was running a fraudulent scheme to make money from fake student loans.

“It was part of the conspiracy that the conspirators actively recruited fake students to enroll at the Columbus Center,” the indictment states, adding that one of the defendants “told individuals that they could obtain ‘free’ money without doing any schoolwork and without attending any classes” and “assured the prospective students that others would do the course work and all she needed was the student’s personal identifying information.”

Six administrators from the Apex School of Theology — based in Durham, North Carolina, with satellite offices around the region — were charged by a federal grand jury on the counts of conspiracy, mail fraud, and financial aid fraud. Two were also charged with money laundering. 

The Department of Justice stated that the defendants allegedly “engaged in a scheme to operate an off-site learning center” that was based in Columbus, Georgia on behalf of Apex, pocketing reportedly $12 million. The document was unsealed on Oct. 20. 

Yahoo Finance reached out to an attorney who represented the school on a different case but has yet to hear back. No attorneys representing the defendants were listed on the indictment.

(Facebook/Apex School of Theology)

‘Free money,’ ‘fake students,’ and fraudulent financial aid

Apex, now shuttered, was a private not-for-profit school offering programs in theology, Christian education, divinity, and more. The school was accredited by the Transnational Association of Christian Colleges and Schools, allowing it to offer federal student loans to its students.

The accreditation body terminated its relationship with Apex early this year, stating in a document in April that the school was not complying with standards.

The DOJ stated that between August 2010 and May 2018, the defendants allegedly recruited the fake students so that the school could “fraudulently apply for federal financial aid.”

The allegedly fraudulent federal financial aid applications included falsifying financial aid information, coursework, FAFSA forms, grades, emails, and more to obtain federal financial aid.

The prospective students, the DOJ added, were also “told that they did not have to do any work or attend classes, but they would have to split their financial aid with the defendants, who used federal financial aid funds to personally enrich themselves.”

The accused also allegedly created false references and fake “spiritual autobiographies” to include as part of that application. 

(Screenshot of DOJ indictment)

But an indictment, the DOJ reminded, is just an allegation and the case is running its course.

The key here is Apex’s story of falsification isn’t new. As Yahoo Finance previously reported, a Florida-based for-profit school did the same, enrolling students en masse with the help of provocative dressed recruiters. 

And earlier this year, the Department of Education cut off federal financial aid to a set of East Coast career schools — including the Harris School of Business — for failing to demonstrate “responsible financial management” under new ownership, which provides a “quality education, training, and student services and to complete the instruction of all enrolled students.”

Aarthi is a reporter for Yahoo Finance covering consumer finance and education. Follow her on Twitter @aarthiswami. If you attended or worked at a for-profit college and would like to share your experience, reach out to her at [email protected]

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