Carla
Franklinville,#2Author of original report
Sat, December 31, 2005
HCI fraud case gets under way Wednesday, December 14, 2005 By JEANNE RIDGWAY Courier-Post Staff PHILADELPHIA A former employee of Harrison Career Institute testified school workers were told by a superior to make up income figures on student financial aid applications, to re-create student aid forms to replace those that had been lost and to copy student signatures on new documents. Greg White, a former financial aid officer at HCI, said the school's internal auditor, Carla Waltman, directed employees to participate in questionable activities in the school's financial aid office. White testified in federal court here Tuesday on behalf of the U.S. Department of Education. The department accuses the school, also known as HCI, of fraud and wants to remove the Voorhees-based school from participation in federal financial aid programs. HCI, which operates 13 campuses in three states, receives approximately $25 million in federal student aid funding per year. HCI has denied the allegations. In questioning by Department of Education attorney Denise Morelli, White said Waltman directed personnel to change the dates on withdrawal records to show that students attended HCI longer than they actually did. The practice benefited HCI, White said, because the school could keep more student federal financial aid money and refund less to the Department of Education. White, who worked at the school for four years before resigning in August 2004, said he followed Waltman's directions for fear of losing his job. During testimony, he told how employees re-created student signatures on financial aid papers by tracing them from other documents and by cutting and pasting copies of signatures from other records. He also said employees were encouraged to fill in empty blanks on student aid applications although federal regulation requires students to complete and sign applications themselves. The former worker said he came to HCI with no previous financial aid experience and that he received no formal training at HCI. During cross-examination, HCI's defense attorney, Steve Gombos, cast doubt on White's truthfulness. Gombos asked White if he was cooperating as a government witness because he was being offered immunity in a pending case connected to a confidential law enforcement investigation. White denied that. Gombos also implied that HCI threatened to report White to federal authorities for "coaching" students on their financial aid applications. White also denied that. Earlier in the day, Patricia Edelson, a senior institutional review specialist with the Department of Education, spent four hours on the stand. She testified about the department's investigation of HCI and its student financial aid practices dating back three years. The department's investigative team, which came to the school unannounced, gathered 700 student files representing students attending five of the school's campuses. Of 160 students who were located and interviewed by the team, 104 statements were taken from students on suspected fraudulent financial aid activities, according to Edelson. The special investigation was triggered, Edelson said, in May 2004 when the Department of Education noticed that HCI was receiving a sharp increase in funding. Testimony continues today before U.S. Department of Education administrative Judge Ernest C. Canellos MORE INFORMATION The New Jersey Department of Labor and Workforce Development has an informational Web site for students of Harrison Career Institute. Some students and employees fear that HCI may close as a result of government allegations that HCI mishandled federal student loans. Students may visit www.wnjpin.net/hci for suggestions, information and answers to frequently asked questions about repaying loans, course completion and HCI graduation. Students are asked to use a link on the Web site to e-mail additional questions.