A Georgia man has been sentenced to six years in prison while also being ordered to pay $910,417 in restitution after pleading guilty in a scam that led to $48 million of federal student loans being fraudulently discharged through a program intended for disabled military veterans. De’reek Banks illegally pocketed nearly $900,000 in payments from more than 500 individuals who believed they were paying for legitimate student loan debt relief services.
Banks offered to help student loan borrowers get their outstanding loans discharged in exchange for a fee. He claimed that special government programs existed that authorized the discharge of student loans. That may have been true, but Banks lied to Federal Student Aid and fabricated hundreds of letters on Department of Veterans Affairs letterhead claiming that the individuals seeking relief were military veterans who were eligible to have their loans discharged because they were totally or permanently disabled. The letters unlawfully led to $48 million of loans being discharged.
Banks pleaded guilty to theft of government property for his role in orchestrating the scheme.
“This defendant brazenly stole funds from innocent student loan borrowers by exploiting a financial aid program intended to assist military vets who sacrificed their health for the security of our country,” said U.S. Attorney Ryan K. Buchanan, in a statement. “He tricked borrowers into believing that he could legitimately obtain federal student loan discharges for them while attempting to defraud the U.S. government of almost 50 million dollars.”
