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Computer School Owner Admits $25 Million Fraud

February 25, 1989

NEW YORK (AP) _ The former owner of a defunct computer training school admitted bilking the government out of $25 million in federal aid for ineligible students through bogus high school diplomas.

Leonard Hausman, the former vice president part owner of Hausman Computer School, pleaded guilty at federal court in Manhattan to one count each of conspiracy and fraud.

Hausman, 50, of Plainview, admitted to U.S. District Judge Pierre N. Leval that he and others conspired to obtain federal loans and grants for students in his school through fake high school diplomas.

He also admitted fraudulently obtaining the $25 million through two Department of Education programs between 1983 and 1987.

The Hausman Computer School, a post secondary training school with about 800 students, closed in 1987 after losing is accreditation.

According to Assistant U.S. Attorney Deirdre Daly, many of the students were not high school graduates and thus were not eligible for federal aid. Under its New York state operating license, the school could only enroll high school graduates.

Hausman’s lawyer, Charles Carnesi, claimed a number of students, who otherwise would have been ineligible, graduated from the school and are now gainfully employed.

Carnesi said Hausman would pay back the $1.4 million in salary he received from the school over the five-year period.

Hausman admitted in his guilty plea that school employees created bogus high school diplomas for students enrolled at the computer school in order to obtain federal aid.

He is the second employee of the school to plead guilty to criminal charges.

Maria Faughaner, 49, of Fort Lee, N.J., a former recruitment director at the school, pleaded guilty last December to conspiracy and making false claims.

She faces a maximum penalty of 10 years in prison and $500,000 in fines when she is sentenced March 30.

Hausman, who is slated to be sentenced April 27, faces a maximum 15-year, $500,000 penalty.

Ms. Daly said there were no plans ″at this stage″ to prosecute any of the students who obtained loan and grant money illegally because ″It’s not clear that the students would have known that there was a violation of the law.″

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