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I need to report FAFSA fraud...how?

marielblewismarielblewis Posts: 3Registered User New Member
My sister-in-law is graduating this year and has been accpeted to a school in Atlanta. Her financial aid package arrive a few days ago and I was suprised to see she had recieved the maximum amount of assisitance. I was suprised because my mother-in-law owns a $300,000 home and two brand new cars outright. She and my sister-in-law recieve Social Security and a sizeable annuity from her late husband's estate. When I asked about it (politely of course) my mother-in-law told me that she just didn't include information about their assets and that she hadn't filed taxes since her husband passed away to avoid estate tax so she just marked the box for not filing a tax return on the FAFSA. She did include her social security, but I am unclear about the annuity. I don't want to ruin things for my sister-in-law, but I feel that it would be better to report this now than to let her wait until three years down the road and have all of this "discovered". I tried to convince my MIL to file a correction on her current FAFSA, but she is determined not to. I feel that the only thing I can do is report it. I looked at the FAFSA website and coannot find any contact information for this sort of thing. Any ideas, comments?
Post edited by marielblewis on
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Replies to: I need to report FAFSA fraud...how?

  • marydwaymarydway Posts: 6Registered User New Member
    It is none of your business. You probably do not know their complete financial history. If I were you, I would stay out of it. I believe in karma, and what goes around, comes around.
  • marielblewismarielblewis Posts: 3Registered User New Member
    She flat out told me she lied on the application. And when the lie is discovered, my 18 yr old sister-in-law will suffer, not her. I wonder how much Karma will help when she has to take a minimum wage job to pay it all back, not to mention felony charges.
  • ugadawg344ugadawg344 Posts: 55Registered User Junior Member
    Dont do anything. Its none of your buisness.
  • merlinjonesmerlinjones Posts: 807- Member
    Shucks, I figure they will be audited or something. Then, when they are audited, all their stuff will be sold at auction. I would let it go because they will be caught when what Bush passed goes through in (I figure) Y2K8 or so and all the FAFSA information is double checked with the IRS. The FAFSA Folks (as I call them) already double check your Social Security number and whatnot with the Social Security folks (again, as I call them). So, if they lied, they are soon to get caught.
    Why not sit them down in a wholesome fashion and give them the what for?
  • kbfunkymonkeykbfunkymonkey Posts: 366Registered User Member
    yea...grab an ice cold coke....sit back and chilax

    it really isnt any of your business....and this is your family...by law...why would you want to report something like this when you dont know the whole story.....seriously, people should just deal with there own stuff before trying to be a public police officer
  • yougotjohnyougotjohn Posts: 654Registered User Member
    This isn't any of your business. If you feel very morally obligated to do something, then just mention to your sister-in-law what you think. But that should be the extent of it. The person at fault here would appear to be the mother, but turning this in only hurts your sister-in-law.
  • brainomaticbrainomatic Posts: 163Registered User Junior Member
    Unfortunately it hurts others too. If she becomes fraudulently eligible for federal pell grants etc. then that takes away money that others deserve, and if she accepts financial aid provided by the college, again, that is money that could/should go to other eligible students who meet the actual criteria. We all know there isn't enough money to go around to meet everyone's actual "need", so there are definitely others who are impacted by this manipulating/cheating of "the system".

    It's one thing suspecting that someone fudged their numbers, but you are in a much more delicate situation when your sister-in-law flat-out told you it was a lie. I don't have any advice for you, but stories like this definitely bother me. Grrrr.....
  • jokr95jokr95 Posts: 96Registered User Junior Member
    Mind your own business.
  • Dcho711Dcho711 Posts: 606Registered User Member
    damn.. everyone is saying "mind you're own business", is it because:
    1) the person should really just leave it alone
    2) the person reporting could have some negative consequences for reporting it?

    i mean if the inlaws did something illegal, whether its family or not, shouldnt a person report it and try to do the right thing?
  • fatherofthefatherofthe Posts: 152Registered User Junior Member
    You're honorable to turn them in. If more people would follow the rules the cost of all goods and services would be less. If you turn them in and the authorities find that they have done nothing wrong, then they will not be penalized. You, on the other hand are taking that risk and may be scorned from the family. I believe in doing what is right.
    We recently passed an anniversary for precious doe (a little girl beheaded abd left in the woods by her own father). Her grandfather finally turned in the parents after years. I'm sure he didn't want to go to his grave knowing that he could have done something and didn't. I will not be piling on to the group that approves of fraud or even the appearance of fraud. Instead I hope that all of the fraudulant filers get their aide revoked so that those who file properly can get what money is available for aide and be fairly treated by those schools who have been duped by all the fraudulant filers. The ulimate karma will be when you go to your final resting place in peace that you have lead a good and honest life.
  • hsmomstefhsmomstef Posts: 3,579Registered User Senior Member
    to report tax fraud -- http://www.irs.gov/compliance/enforcement/article/0,,id=106778,00.html

    to report fraud on FAFSA -- call 1-800-MIS-USED (1-800-647-8733)

    Info that financial aid departments use to detect fraud (you might just print it out for you mother) -- http://finaid.org/educators/fraud.phtml
  • somemomsomemom Posts: 9,194Registered User Senior Member
    Mariel:

    Since you probably don't want to start a family feud, but you are concerned about the student....can you tell the SIL/MIL that most universities do verification, that many of the things she attempted could be caught by the school, etc. The FAFSA people do not care whether her home is $30,000, $300,000, or $3,000,000 home value is not counted. They also don't count cars. If she had a lump sum in hte bank and was planning to buy a car, she would receive advice on this website to buy a car with the cash before filing the FAFSA. The value of cars is not asked for on the FAFSA...some schools have their own questions either on CSS Profile or in addition to FAFSA...I think UVA does FAFSA but then asks about both cars & home value.....so she could be asked there; otherwise, those items are not fraud.

    As to the annuity, it depends on how it it legally set up as to whether seh reports the income and/or the entire asset value. I think there is something about less than $50k and eligible for 1040EZ allowing you to not even count assets. If she does need to report assets, then the annuity either is hers or some one else's, depending on who's tax ID number it is connected to, right? It has to belong to some one.

    She may not have committed outright fraud, but that annuity is some one's asset...though I don't understand the part about estate tax avoidance and not filing tax returns. Most wives are not going to pay any estate taxes anyway, and besides that the exempt amount is over $1,000,000, so just how huge is that annuity? She may be mis-stating something, but a wife should not need to worry about estate taxes.

    So, remember, sometimes people tell their family one story, but the real facts are different.

    I think I would tell her she may be making some errors that could come back to bite her later, but MOST of what she said she not be an issue. If she is really scared of estate taxes, maybe she would gain some real peace of mind in realising she does not owe any????

    You could also let your SIL to talk to the finaid people at her chosen school to ask them if she has filled out the forms correctly; as that finaid link above stated, the terms & forms can be confusing!

    Good luck!
  • hsmomstefhsmomstef Posts: 3,579Registered User Senior Member
    my guess is that with the death of her spouse, finances were somewhat confusing and overwhelming -- and that she may have put off doing taxes because of that. now, she doesn't know what to do -- if she files taxes, they will audit for the missing years. They will eventually catch up with her and her best choice would be to start with the taxes and get them files and square up with the IRS. Hopefully she realizes this soon -- otherwise the IRS will let her know with a nice letter and a bill -- they take about 3-4 years to send that letter to regular, low to middle income people who don't file taxes.
  • fanter321fanter321 Posts: 94Registered User Junior Member
    FAFSA Fraud..
    It happens a lot. I personally know some of the friends who do that. they hide their money oversea or some of their parents work oversea and they don't report it. they are then eligible for lots financial aid. people like me receive no financial aid because all of our asset are being reported...how unfair.
  • cpsmithcpsmith Posts: 1Registered User New Member
    My ex-husband married me with the plan of living with me and my daughter for a year and then divorcing me just the financial aid.

    He claimed he supported over 50% of the care for a depedant for a year, but didnt have to list her social on the application. When I tried to return to school, They rejected my application, stating that My daughter had been claimed by my "husband" even though he didn't use her social security number. They put 2 & 2 together and figured he was claiming her.

    Once I sent them proof of our divorce, I finally got my financial aid back and continued school. Single moms in college, please watch out for that total prince charming that comes along and sweeps you off your feet. If they offer to stop going to school to "provide for" you and your child(ren) beware.

    They will take everything in a divorce, leave you with the bills, and claim your children for a free ride through school.
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