Bank, Two Officers Accused in $35 Million Student-Loan Fraud
TAMPA, Fla. (AP) _ A savings and loan and two former officers have been indicted on charges of conspiracy, theft and fraud in connection with the student-loan program, federal prosecutors said Wednesday.
Florida Federal Savings Bank, through its student-loan division, submitted fraudulent insurance claims for 17,000 students totaling $35 million, said Gregory W. Kehoe, assistant U.S. Attorney for Florida’s Middle District.
He said the claims were supported by documents falsely showing that attempts were made to collect.
Florida Federal received some $18 million from the Department of Education before the agency ″shut the door,″ Keohoe said.
Named as defendants with the St. Petersburg-based thrift were Robert O. Harmas, 42, of Noblesville, Ind. and James J. LaMantia, 59, of Largo.
The doctored claims were submitted between Novemmber 1986 and July 1987, the 43-count indictment states.
At the time, Florida Federal, formerly Florida Federal Savings and Loan Association, was the second largest thrift in the Southeast and the third largest provider of guaranteed student loans in the country, authorities said.
Harmas was a vice president and operations manager of the loan division; LaMantia was assistant vice president and manager of collection and claims.
The loan program makes low-interest loans available to students to pay for postsecondary education. Lenders lend their own funds and the federal government or a guarantee agency insures against loss due to default by a borrower.
″The students never had an opportunity to repay the loans,″ Kehoe said. ″There’s no evidence the claims or proper documents were ever sent to them.″
Kehoe said evidence indicated the money went to the bank.
Each count carries a maximum penalty on conviction of five years in prison and $50,000. The prosecutor said the defendants were expected to surrender.