Tucson man sentenced for student loan fraud scheme

On May 10, 2010, United States District Judge John M. Roll sentenced Stephen Gallagher, 29, of Tucson, Ariz. to 42 months in prison for his role in a scheme to fraudulently obtain student loans. Gallagher had pleaded guilty on June 30, 2008 to Count One of the Indictment charging Conspiracy to Offenses Against the United States, specifically, Bank Fraud, Wire Fraud, Fraud in Connection with Access Devices, and Identity Theft. From 2002 to 2007, Stephen Gallagher submitted over 200 student loan applications via the Internet to various financial institutions seeking more than $11 million in fraudulent student loans. Gallagher was successful in obtaining approximately 42 fraudulent student loans totaling over $686,000. The majority of these loan applications originated from one of eight different America On-Line (AOL) email accounts registered in the name of Stephen Gallagher. Gallagher submitted loan applications in his own name as well as in the names of certain family members. Gallagher then added these other individuals to his bank account so he could deposit the student loan checks, which were made payable in the name of the borrower. Fraudulent supporting documentation, such as proof of employment and residence verification, was submitted by Gallagher to the financial intuitions via facsimile. Posted in: Deposit Account Fraud