Man gets 36-month term in scholarship scheme

More than $520,000 received from students

June 04, 1999|By Michael James | Michael James,SUN STAFF

An Essex man convicted of bilking more than $520,000 from tens of thousands of students in a phony scholarship scheme was sentenced to 36 months in federal prison yesterday after prosecutors called him "an incorrigible person who makes his living by fraud."

Before sentencing in U.S. District Court in Baltimore, Christopher E. Nwaigwe, 38, said he didn't mean any harm when he persuaded 52,000 students around the country to send him $10 each for scholarship application fees.

The scholarships didn't exist. Often the students got nothing or, at best, a generic list of places where they could apply for financial assistance.

"I got thank-you letters from hundreds of people, thanking me for my service," Nwaigwe told Judge William M. Nickerson.

U.S. postal inspectors, who investigated the case, said they don't believe he got such letters. Nickerson wasn't swayed either, calling Nwaigwe "a con man through and through."

"I don't believe Mr. Nwaigwe believed he was providing anything of value to anyone," Nickerson said, noting that Nwaigwe misrepresented himself as a legitimate educational institution in his mass mailings.

Three months ago, authorities discovered more checks from students under Nwaigwe's bed at the halfway house where he has been since he was indicted in October.

"He was supplementing his income by doing it all over again," said Assistant U.S. Attorney Joyce K. McDonald. "He returned to his same old scam."

The letters found in a suitcase under his bed were unopened, and the checks hadn't been cashed. Nwaigwe's attorney, Barry Pollack, said the letters were leftovers from the original scheme and not the result of another attempt to solicit scholarship fees.

At his trial in March, prosecutors said Nwaigwe sent out letters from 1992 to 1996 after he bought 380,672 students' names and addresses from a New York-based list company.

Thousands of the students got official-looking letters bearing a scholarship fund letterhead, such as "The National Scholarship Program."

The letters varied, but several thousand began with: "Congratulations! You have been selected." Students were informed that they qualified for grants ranging from $2,500 to $7,500 if they sent in a $10 processing fee.

McDonald, the prosecutor in the case, said Nwaigwe engineered "a very clever fraud" that took advantage of students' often desperate need for financial aid.

The $10 processing fee was small enough that many people didn't mind taking a chance, McDonald said.

"Ten dollars was under people's radar screens," she said. "The picture we have of Mr. Nwaigwe is that he is an incorrigible person who makes his living by fraud."

Nwaigwe is the first person to be prosecuted for scholarship fraud, according to the Federal Trade Commission. The commission brought civil complaints against Nwaigwe and seven companies around the country in 1996 as part of a crackdown on bogus scholarships. Each year, crooked companies collect millions of dollars from hopeful students by dangling fake scholarship offers, FTC officials say.

Authorities said it is unclear what Nwaigwe did with the money, almost none of which has been recovered. He was not ordered yesterday to pay any restitution. Nickerson said it would be too complicated to try to determine how many of the 52,000 people should be reimbursed for a nominal fee.

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