Angela Kathryn Mirabella “doesn’t look like a fraudster at all.” That is the first comment most people make when they see her smiling face framed by nondescript glasses and short, highlighted hair.
Then again what, exactly, should a fraudster look like? Chances are, if you think you know, you don’t. The person committing massive fraud could be in your family, your workplace, house of worship or fitness center. And that’s the problem. Fraud has many faces, and Mirabella is simply one of them.
The Hard Facts
According to the U.S. Postal Service, the agency that gets involved in mail fraud, the organization that Mirabella created was not only impressive but successful. The call center she created operated between 2017 and 2020. They were able to contact 380,000 loan borrowers.
The release by USPS stated:
“These agents allegedly feigned an association with the U.S. Department of Education and, without authority to do so, guaranteed borrowers’ enrollment in programs that would lower their monthly payments and result in loan forgiveness.”
If one of the people contacted grew suspicious, they would be told that it was a limited-time offer. Obviously, not everyone contacted went along with the deal, but the California Attorney General’s office found that thousands (more than 19,000, in fact) were duped and Mirabella pulled in more than $6 million in pure profit.
Of those who fell victim, 3,000 are California residents which is why the California AG got involved.
Naturally, Angela Kathryn Mirabella did not do this on her own. Included in the rings were four call center managers and two sales agents. A grand jury convened and Mirabella is currently charged with 87 counts including fraud and grand theft by false pretenses. More than $2.5 million was laundered.
Not surprisingly, in addition to the upfront fees to join the programs, the students (and their families) paid additional fees that were already offered for free in the federal loan program.
Insidious
What makes this kind of fraud particularly insidious, is that those who agreed to having reduced payments (or no payments) had to give up personal information. Their identities were stolen. In talking to the fraudsters, the students agreed to have their student aid accounts changed without their consent.
However, what bothers me the most, is that Angela Kathryn Mirabella took advantage of the most vulnerable. As the “loan reduction payments” to Mirabella kept coming out of their student loan accounts, the California AG said:
“This led many of the victims to stop making their monthly payments on their actual student loans, which resulted in late payment notifications, increased loan balances and sometimes a complete student loan default.”
Scam artists like Mirabella exist because they operate in a world with no oversite and little official follow-up. During the pandemic, the opportunities for scams of this nature increased. Though the savvier of us (using 20/20 hindsight), might ask, “Why didn’t the students call the federal student loan program?
We have to remember that Mirabella and her cohorts went after young, unsophisticated students and their families. In many cases, English was not the primary household language. Of course, Mirabella had Spanish speaking call center agents in addition to English speakers.
Should the government have provided more warnings? While the term “loan forgiveness” has been tossed around by politicians, nothing has yet been settled. What has been sent out to loan holders are numerous warnings of scams.
At some point, those who take out loans must understand that it is not free money. Those who commit fraud are clever enough to use terms like loan forgiveness as the carrot to drive desperate students and their families to turn to their services.
No Doubt Where This Leads
No doubt Angela Kathryn Mirabella will see jail. No doubt her cohorts will be sentenced as well. For the fraudsters, this was easy money. For the students and their families, a painful set of lessons has been learned. “Trust,” is a moving target. We want to believe an official looking email followed by concerned, official sounding telemarketers have our best interests at heart. They rarely do.
There is no substitute for due diligence.
One last comment younger Americans should take to heart: whether or not it is a function of familiarity, studies have shown Gen Y and Millennials are more prone to cyber fraud than Boomers or Gen-X.
They need to stop and understand the world is far from being an ethical and open place. Familiarity may not always been sophistication.
