Cynthia Denise Melvin, a 59-year-old woman from Fayetteville, North Carolina, has pleaded guilty to running a large-scale scam that defrauded the Department of Education of $5 million in financial aid. From 2016 to 2023, Melvin orchestrated a straw student scheme, recruiting over 70 participants who pretended to be students applying for federal financial aid.
She applied to colleges, received aid, and funneled the funds, which were intended for tuition, to herself and the “students.”
Melvin used fake student identities to enroll them in multiple community colleges across North Carolina, and even went as far as impersonating them, ensuring it appeared they were attending classes and completing assignments.
The Department of Education issued financial aid based on these fraudulent applications, and leftover funds were pocketed by Melvin and the fake students.
She faces a maximum sentence of 20 years in prison, a $250,000 fine, and three years of supervised release. She will also be required to pay restitution. This scheme is among the largest “straw student” fraud cases in recent years.
This case highlights the growing trend of fraud rings targeting lower-cost community colleges where the remaining financial aid refunds are often higher.
Other similar cases, such as one in Louisiana, show the widespread nature of these scams, with participants unaware they were enrolled in fraudulent student loans.
The Department of Education’s Office of Inspector General has urged schools to be vigilant about spotting suspicious patterns, such as students sharing the same addresses or class schedules, which could indicate a fraud ring.