Three Sentenced to Prison for Submitting False Claims for Student Financial Aid

United States Attorney John L. Brownlee announced today that Karen Sue Justus, age 58, of Fort Wayne, Indiana; Joy M. Justus, age 33, of New Haven, Indiana; and Jason P. Justus, age 32, of Fort Wayne, Indiana, were all sentenced for their roles in a scheme to fraudulently obtain financial aid money from the Department of Education and to submit false Wage and Tax Statements to the IRS.

Karen Sue Justus and Joy M. Justus were each sentenced to one year and one day in prison.

Jason Justus was sentenced to 21 months in prison.

In addition, the three defendants have been ordered to pay the Department of Education $105,964 in restitution and $19,361 to the Internal Revenue Service in restitution.

"The money the Justuses fraudulently obtained from the Department of Education was intended to provide educational opportunities to those who need assistance. We hope the prison sentences ordered for this criminal conduct will send the message that this kind of fraud will be prosecuted and punished," said United States Attorney John Brownlee.

The defendants each pleaded guilty to a single charge of conspiracy to submit false claims to the United States pursuant to written plea agreements in October 2006.

According to evidence presented by Assistant United States Attorney C. Patrick Hogeboom, III, Jason Justus was incarcerated in the Pulaski Correctional Unit in January 2003. Beginning in July 2003, Jason, Joy, and Karen Justus developed a scheme to submit false Wage and Tax Statements to the IRS and file false applications for student financial aid for Jason Justus and at least 14 others at the Pulaski Correctional Unit. In one instance, Karen and Joy Justus filed false Wage and Tax Statements for a man who had already passed away.

When submitting applications for student financial aid, the Justuses would claim that the inmates were attending either Ivy Tech State College, which is located in New Haven, Indiana, or Owens State Community College in Findlay, Ohio and Toledo, Ohio. The Pulaski Correctional Unit does not have any educational agreements with either Ivy Tech State College or Owens State Community College. The Justuses would ask for the maximum amount of financial aid, and would deposit the majority of it in a bank account in Indiana, sending a small portion back to the co-conspirators at the Pulaski Correctional Unit.

The conspiracy started in July 2003 and lasted until April 2005. In total, the fraudulent applications resulted in the payment of $110,227 from the Department of Education to people who were not enrolled in programs at these colleges.

The case was investigated by the Internal Revenue Service and the Department of Education.

Assistant United States Attorney C. Patrick Hogeboom, III prosecuted the case.