FBI Seizes $3 Million From Owners of Orange County Nursing College in Fraud Probe

Accusing the owners of Pacific College, a private Orange County nursing school, of operating a brazen student financial aid scam, the U.S. Department of Justice is seeking legal ownership of more than $3 million FBI agents recently seized following a corruption probe.

“Beginning in November 2012 and continuing through the present day, the FBI, the United States Department of Education and the California Department of Consumer Affairs have been investigating a financial fraud scheme by which a private, for-profit nursing school in Costa Mesa called Pacific College sought to and did defraud the Department of Education of federal student aid [FSA] funds,” law enforcement officials alleged this week inside Orange County’s Ronald Reagan Federal Courthouse in Santa Ana. “The government’s investigation revealed that Pacific College, among other things, inflated grades, falsified attendance records and passed students through its nursing program in a manner that maintained a false standard of academic progress that kept students enrolled in the program and sustained the flow of incoming FSA funds.”

According to Assistant United States Attorney Steven R. Welk, “Pacific College is also believed to have unilaterally increased tuition rates for various students in order to eliminate refunds to the students, which resulted in Pacific College retaining more of the FSA funds than it was legally entitled to retain.”

The FBI seized funds from bank accounts tied to college officials William L. Nelson and his wife Ila; William O. Woo and his wife Donna Leung; Marcus B. Tromp; and Jennifer K. Woo, the forfeiture complaint states.

Federal agents claim Pacific College took nearly $23 million in FSA funds between 2010 and 2017 and maintained the inflow of government money by “improperly relaxing admissions criteria in order to recruit as many students as possible so as to obtain the funds for the purpose of defrauding the federal aid program.”

Welk asserted that the college was supposed to enforce a “minimum threshold” of requiring a 10th-grade reading level for incoming students, but instead admitted applicants who could not read beyond middle-school standards.

Pacific College pushed “unprepared and unqualified students through the nursing program in order to collect their FSA funds,” the federal prosecutor told presiding U.S. District Court Judge Cormac J. Carney. “Some students who failed exams were given passing scores that allowed them to continue with the program. Non-failing scores were also improperly altered. For example, if a student scored 60 percent on an exam, the school’s instructors would score the exam above 70 percent. If a student scored 70-75 percent, they sometimes would be scored at 100 percent.”

FBI Special Agent Jessie T. Murray supported Welk’s assertions with a sworn declaration.

On its website, Pacific College officials boast they run “one of Southern California’s most premier nursing and vocational” institutions.

Nelson, president of the college, states on the website, “We strive to prepare and equip students with professional skills for an evolving global society. These skills include core ingredients of critical thinking, effective decision making, ethics and leadership.”

The U.S. Marshals Service currently possesses the confiscated funds.

A hearing date has not yet been scheduled.

Leave a Reply

Your email address will not be published. Required fields are marked *