Danville woman pleads guilty to student loan fraud

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Published: Nov. 4, 2022 at 10:59 AM EDT
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DANVILLE, Va. (WDBJ) - A Danville woman has pleaded guilty in federal court after using other people’s ID information to submit and receive fraudulent student loans, according to the US Attorney’s Office.

Karren Warren, 43, waived her right to be indicted and pleaded guilty to one count of student loan fraud and one count of unlawful transfer or possession of identification affecting interstate commerce.

According to court documents, between 2013 and 2018, Warren devised a scheme to defraud the United States Department of Education (USDOE), the American Public University System (APUS) and Capella University, by preparing and submitting false Free Application for Federal Student Aid (FAFSA) forms.

Warren admitted to recruiting others to provide her with their personal identifying information, which she then used to prepare and submit fraudulent enrollment applications, according to the US Attorney’s Office.

Once the financial aid was obtained, Warren enrolled the people, whose names had been submitted using the false FAFSAs, in online educational institutions. Most people enrolled in that manner either did not participate or withdrew from the courses. Warren then converted the federal financial aid funds for her personal use, thus failing to use the funds solely for education-related expenses, as required by USDOE.

In all, Warren caused a loss of at least $264,000 to APUS, Capella and the USDOE, according to federal documents.

Warren faces a maximum penalty of 15 years in prison. A federal district court judge will determine any sentence after considering US Sentencing Guidelines and other statutory factors.