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WILMINGTON – Cynthia Denise Melvin, age 59, pled guilty to conspiracy to commit wire fraud in connection with the theft of millions from the federal student aid program.

At sentencing later this year, Melvin faces a statutory maximum sentence of 20 years, a $250,000 fine, and three years of supervised release. Melvin will also be required to pay restitution.

According to court documents and other information presented in court, between approximately 2016 and 2023, Melvin organized, led, and conspired with a ring of over 70 “straw students” to fraudulently apply for financial aid at multiple community colleges in the Middle and Eastern Districts of North Carolina. Investigators estimate that the scheme resulted in more than $5 million in fraudulent financial aid disbursements.

Federal Student Aid (FSA), an office within the U.S. Department of Education, is responsible for administering financial aid programs to assist qualified students in their pursuit of post-secondary education, including grants, loans, work study funds, and other disbursements. FSA also develops, distributes, and processes the Free Application for Federal Student Aid or “FAFSA”. After a school applies a financial award to a student’s tuition and fees, any remaining balance is refunded to the student for education-related expenses.

According to the investigation, Melvin collected personal identifying information (PII) of straw students in North Carolina and used that information to submit applications for admission at the targeted schools. Thereafter, Melvin attempted to make it appear that the straw students were attending classes, completing coursework, and communicating with the targeted schools when, in fact, Melvin impersonated the straw students for these and other purposes. To obtain financial aid, the Melvin submitted FAFSA forms for the straw students through FSA’s website and in so doing concealed her identity as the preparer of the documents. As a result of the scheme, the straw students were awarded tuition, which was wired from the United States Treasury to the targeted schools in North Carolina. The straw students also received student loan refunds, which the schools disbursed after collecting the tuition cost. As the ringleader of the scheme, Melvin received a substantial portion of the refunds.

During the execution of a federal search warrant at Melvin’s residence, Office of Inspector General investigators recovered documents and other evidence establishing the operation and mechanics of the scheme, including PII and coursework for the straw students, FSA account usernames and passwords, and bank account and routing numbers.

Daniel P. Bubar, Acting United States Attorney for the Eastern District of North Carolina, made the announcement after Chief Judge Richard E. Myers, II accepted the plea. The U.S. Department of Education, Office of Inspector General, investigated the case. Assistant United States Attorney Adam F. Hulbig prosecuted the case.