Cynthia Denise Melvin, a 59-year-old resident of Fayetteville, has pled guilty to conspiracy to commit wire fraud related to a scheme that defrauded the federal student aid program of over $5 million. The case was heard in Wilmington, North Carolina. At her sentencing later this year, Melvin faces up to 20 years in prison, a fine of $250,000, and three years of supervised release. She will also be required to pay restitution.
The fraudulent activities took place between 2016 and 2023. Melvin orchestrated a plan involving more than 70 "straw students" who applied for financial aid at community colleges across North Carolina's Middle and Eastern Districts. Federal Student Aid (FSA), part of the U.S. Department of Education responsible for managing financial aid programs such as grants and loans, was targeted in this scam.
Court documents revealed that Melvin gathered personal information from straw students and used it to submit false applications for admission and financial aid at various schools. She impersonated these students by pretending they were attending classes and completing coursework when they were not. FAFSA forms were submitted under the guise of these students through FSA’s website while concealing Melvin's identity as the preparer.
The scam led to tuition payments being wired from the United States Treasury to targeted schools in North Carolina, with additional refunds disbursed after tuition costs were collected. As the ringleader, Melvin received significant portions of these refunds.
During a search at her residence, investigators from the Office of Inspector General found evidence supporting the operation's mechanics including personal identifying information (PII), coursework records for straw students, FSA account details, and banking information.
Daniel P. Bubar, Acting United States Attorney for the Eastern District of North Carolina announced the plea acceptance by Chief Judge Richard E. Myers II. The U.S. Department of Education's Office of Inspector General conducted the investigation with Assistant United States Attorney Adam F. Hulbig prosecuting.
Further court documents are available on the U.S. District Court for the Eastern District of North Carolina's website or through PACER using Case No. 5:25-CR-14-M.