Couple Get Prison for Student Loan Scam

The husband and wife team were partners in business as well as in life. Together they co-founded Carnegie Career College in Ohio. From at least 2003, Carnegie College positioned itself as a private not-for-profit college that offered a select number of associate degrees, as well as various “certificate” programs in areas such as blood drawing.

The founders applied with the U.S. Department of Education to participate in the federal student financial aid (SFA) program. That application was approved in December 2003.

The husband was dean and director of education at Carnegie College, while the wife was the director of Carnegie and was responsible for financial matters at the school. He was also founder of Historical Chapel Ministries, which was registered as a tax-exempt charitable organization. It had offices in the same building as Carnegie College in Suffield, Ohio.

Husband and wife ministers

Both the husband and wife considered themselves ministers of HCM, but there were no regular services or congregants.

In February 2007, Carnegie College opened a branch “campus” that operated in a single-family home in Canton, Ohio. In 2010, Carnegie moved its branch campus to a commercial building in North Canton, which also hosted a variety of other family ventures, including a driving school and a massage service.

From June 2007 through May 2012, the couple fraudulently obtained approximately $2.3 million from the Department of Education by submitting applications for SFA funds that stated students at Carnegie College had obtained valid high school diplomas.

They also falsely told prospective students they would earn a valid high school diploma at the same time they attended Carnegie College and that such a diploma would be paid for by a “scholarship from a church” in order to increase enrollment and access to SFA funds, according to court documents.

Not eligible for SFA money

The couple recruited students who had not earned high school diplomas or G.E.D. certificates, and thus were not eligible for SFA funds, and submitted fraudulent financial aid documents to the Department of Education. They used online high schools, including Australian-based Adison High School, to purchase fake high school diplomas and coursework transcripts for students who were not required to attend any classes or complete any coursework, according to court papers.

The wife paid Adison High School, which provided diplomas using the graduation date on which the student would have graduated from high school had they completed high school in the normal course. Sometimes those dates predated general public access to the Internet.

They also comingled fraudulently obtained money in several accounts and used that money to fund personal expenditures and expand Carnegie College.

The couple were arrested and pleaded guilty to conspiracy to commit mail fraud and conspiracy to launder money. The husband also pleaded guilty to obstruction.

The couple were sentenced to prison for defrauding the Department of Education out of more than $2.3 million by obtaining fake high school diplomas for prospective students, fraudulently applying for financial aid on their behalf by representing that the students had the necessary educational credentials, and then enrolling them in the college that the couple operated, law enforcement officials said.

John “Richard” Ceroni, 65, was sentenced to 69 months in prison. Adale “Marie” Ceroni, 63, was sentenced to 55 months in prison. They were ordered to pay more than $2.3 million in restitution.

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