Feds: Columbia U. affiliate's financial aid exec took bribes

By LARRY NEUMEISTER Markets Associated Press

A former official at Columbia University's Teachers College pocketed at least $350,000 by carrying out a decades-long scheme that dished out hundreds of thousands of dollars in financial aid in exchange for kickbacks from three students, authorities said Thursday.

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Melanie Williams-Bethea, director of financial aid at Teachers College until last May, was charged with running the scam since 2008 with students she knew socially. She was released on $50,000 bail after an initial appearance in Manhattan federal court. Her attorney declined comment.

A criminal complaint said the 47-year-old Queens resident earned at least $350,000 illegally as she socialized with the women, including vacationing with one student in the Dominican Republic, Hawaii, New Orleans and Anguilla. They also took a cruise together in the Caribbean in 2011, authorities said.

Williams-Bethea faces charges of conspiracy, bribery and fraud in connection with federal student aid. The students were arrested as well.

On its web page, Teachers College described itself as the "first and largest graduate school of education in the United States" with more than 5,000 students studying health, education, leadership and psychology.

U.S. Attorney Geoffrey S. Berman said in a release that the defendants falsified documents to show that the students suffered extreme financial hardship, necessitating bigger payouts than others received.

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"A substantial portion of this stolen money was allegedly kicked back to Williams-Bethea. Student loan fraud ultimately affects all students and taxpayers with increased fees and interest rates," Berman said.

Debbi Mayer, head of the U.S. Department of Education Office of Inspector General's regional office, said the fraud "targeted the very students she was supposed to help."

Authorities said in court papers that the three students received hundreds of thousands of dollars in unjustified awards, typically tens of thousands of dollars at a time.

The complaint said one student received nearly $1 million in stipends, scholarships and loans over a period of years — not all of it legitimately.

It said the school fired her after discovering the alleged wrongdoing.

James Gardner, a spokesman for Teachers College, said the fraud was discovered last spring during a review of financial aid awards.

"We immediately launched an internal investigation, which identified improper actions by a single staff member," he said. "The college reported its findings to federal and state authorities, and has been working closely with federal investigators to uncover all the facts related to these improper actions."

Gardner added: "We take the matter of fraud and the misappropriation of college funds very seriously, and remain deeply distressed over the betrayal of trust in this matter."