One man has been charged and another is wanted on warrants after an elaborate student loan fraud scheme that ended with the Alberta Student Aid office and several Calgary private post-secondary institutions being defrauded of more than $240,000.
Calgary police said they began their investigation in October 2019 after a peace officer with the Advanced Education Special Investigations team contacted them about a number of inconsistencies with several student loan applications, police said in a news release Tuesday morning.
It’s alleged that two men used stolen identities and personal information of 21 people who were already victims of other data breaches and mail thefts to fraudulently apply for student loans from the provincial government. The incidents took place between May 2017 and May 2020, police said.
Police said the men would use the stolen IDs to enrol as students at post-secondary institutions and apply for student aid. Most of the loan applications were done online. Police said loans were approved for amounts of $25,000 to $38,000 for each “student.”
The money was deposited into the bank accounts provided by the alleged fraudsters. Police said the bank accounts were also set up using the same stolen IDs and personal information.
In a news conference Tuesday morning, Staff Sgt. Geoff Gawlinski said in order to fulfill the requirements of obtaining and maintaining the loans, the suspects would either attend classes themselves or have other people sit in seats within those classes posing as the fake students.
At times the suspects would simultaneously attend multiple schools using different fraudulent identities in order to maximize payouts, police said.
Gawlinski said the police do not expect charges to be laid against the other “stand-in students” besides the two named suspects because at this point their identities are unknown. He said none of the fake students disguised themselves in any way – outside of using an alias.
The total payout for each loan was upwards of $27,000, CPS said.
“Identity theft and fraud are serious offences that carry significant consequences and impact for the victims,” Staff Sgt. Geoff Gawlinski said.
“Oftentimes victims don’t know they are a victim, even after their finances and credit have been damaged. We are working diligently with the administrative staff of all the affected schools, as well as the Alberta Student Aid loan office, and various financial institutions to ensure robust security measures are in place.”
Gawlinksi said Tuesday some of the 21 victims did realize their identities had been compromised after receiving letters about loans they did not take out or during the course of other financial transactions.
Dave Guylenz Mitchell Beauvais, 32, is charged with money laundering, fraud over $5,000, personation, possession of identity documents, uttering forged documents and possession of a controlled substance. He is scheduled to appear in court on Nov. 10.
Kader Dahchi, 30, is wanted on warrants for one count of using a forged document and one count of identity fraud.
Police said Tuesday they do not believe Dahchi is from Calgary or is still in the Calgary area now; however he had been in the city during the course of the alleged scam.
The suspects are also alleged to have committed credit card and cheque fraud, as well as obtained mail services fraudulently.
Police confirmed Tuesday that money is unrecoverable in cases like this. It is not the responsibility of the victims nor the schools to cover, and in this case the loss would fall to taxpayers to make up.
Global News reached out to the officer of Advanced Education Minister Demetrios Nicolaides to ask what kinds of safeguards are in place to try to mitigate such fraud schemes.
“We do have processes in place, but due to the sheer number of applications we receive and having to rely on the information given by the student, this sometimes happens,” Laurie Chandler, the press secretary for the minister, said in an email.
“However, as soon as the inaccuracies were noticed by the Advanced Education Special Investigations Unit, they notified the appropriate authorities and we co-operated fully with the police investigation. ”
Increase in fraud activity amid COVID-19 pandemic
Spencer Callaghan, a senior manager of communications at the Canadian Internet Registration Authority, told Global News that unfortunately, such fraud attempts are not uncommon.
“We see it every day,” he said. “We see data leaks, we see huge breaches from various institutions, organizations and things like that, and unfortunately, a lot of people’s information is out there on the web.
“To be honest, we’re never really all that surprised with the different schemes and the depths cyber-criminals will go to exploit people and to commit crimes.”
The Calgary Police Service said it has seen an increase in online fraud and identity crimes throughout the COVID-19 pandemic.
Police said as offices quickly transitioned to remote work situations, there was an increase in identity fraud being committed online.
In 2019, there were 148 online identity crimes reported to police. Last year, that number soared to 261.
Police say this isn’t a crime that should be taken lightly. Criminals who steal identities and personal information can be connected to organized crime like drug and human trafficking.
The CPS provides the following tips to people to help protect their personal information:
- Do not give any personal or financial information — including bank account numbers, credit card numbers and birthdates — to someone you don’t know or enter it on unsecure websites.
- Regularly monitor financial records such as bank statements, credit reports and bank accounts. If you notice anything suspicious, notify your financial institution immediately.
- Report fraud to police or the Canadian Anti-Fraud Centre.
Calgary police did not release the names of the post-secondary institutions that were targeted in the scheme.