After City College was targeted in a statewide financial aid fraud, campus officials will begin making random calls to  online students to check their legal identity.

The Los Angeles Times reported on Sept. 19 that scam artists posing as students or stealing identities from other people illegally obtained more than $770,000 in financial aid and loans from California community colleges and online schools. A total of 17 people were indicted since August in six cases that involve 15 California campuses, including Santa Barbara City College, according to the U.S. attorney’s office in Sacramento.

College officials have declined to discuss the federal investigation until this week, when Financial Aid Director Brad Hardison agreed to an interview with The Channels.

“It’s a nationwide issue, not unique to SBCC,” Hardison said. “It would be unusual if we were not affected.

Hardison said that starting with Fall 2012 enrollment, admission workers will make random calls. If they find conflicting data, financial aid counselors will conduct follow-up phone interviews and may—eventually—ask students for a face-to-face meeting

Shauna Farbrega and April Myles have been indicted for  “fraud rings” that included Santa Barbara. Federal investigators charge the women used student identities to obtain federal loans through financial aid programs.  In some instances, plotters used identities of severely handicapped people and prisoners to apply for aid and some recruited “straw” students with no intention of attending school who kicked back money, the indictments said.

Online classes are the most targeted for fraud. Since students don’t have to be seen, anyone can pose as a student and register for the class. Once the withdrawal period has passed, they stop attending class and hold on to the money.

“If they have been in class long enough to get the money, there is no way for us to get the money back after the withdraw period,” Hardison said.

Some $770,000 was scammed out of California community colleges. About $15,000 of that came from Santa Barbara City College.

Federal regulations are getting tighter and tighter because of this ongoing problem. A report by the Office of Inspector General states that in 2005 the office opened 16 distance education fraud ring investigations; in 2012, that number grew to 119.

The office put out a call to action letter in October 2011 to notify Calif. community colleges of the growing threat.

“SBCC has been focusing on financial aid fraud prevention even in advance of the Oct. 20 call to action,” said Allison Curtis, director of admissions and records. “The college has been actively putting measures in place to detour financial aid fraud.”

For example, teachers must now file early reports on which students are and are not attending classes or submitting online work.

U.S. vs. Shauna Fabrega is set for January 14, 2013.

U.S. vs. April Myles is set for October 15, 2012.