A copy of the letter published below was delivered to the following 10 people and institutions:
Please advise which institution is best suited for looking into a possible accounting fraud case by the U.S. Department of Education.
Based on my experience, the U.S. Department of Education creates and maintains assets without having the necessary corresponding debt instruments that meet the commonly accepted criteria, such as Uniform Commercial Code that applies to promissory notes.
As far as I know, such fictional balance sheet entry creating and maintaining without having the actual corresponding assets is illegal. Over the last decades, most of the accounting scandals (Enron, WorldCom, Waste Management, etc) have been related to fictional assets and/or revenue creating. The same seems to apply to the U.S. Department of Education operations.
My experience with the U.S. Department of Education has been documented. While I am just one individual, I believe that this case has much broader ramifications. Many investors invest their money in the U.S. government bonds, so, clarity in this area is necessary. As part of a full relevant disclosure, these investors deserve to know if certain parts of the U.S. government have been creating assets without having the necessary corresponding debt instruments.
Accordingly, I do believe that thorough auditing of the U.S. Department of Education by an impartial entity can reveal, in how many instances assets have been created without the corresponding financial instruments, such as legally binding promissory note and a legally binding contract between an alleged borrower and lender.
Further, based on my personal experience I know, that in order to turn the fictional revenue streams and assets into real ones, the U.S. Department of Education uses extortion-like techniques, such as threats, false statements, document fabrication, intimidation and bullying.
Even when it is clear, that the U.S. Department of Education is unable to verify that the debt and corresponding debt obligations actually exist, the U.S. Department of Education refuses to end its unvalidated monetary demands and to close the case as requested. Behind this refusal may also be the need to keep in the books the fictional assets.
Briefly, the U.S. Department of Education operates by using the powers granted to it to demand money from an individual, while disregarding the fact that the corresponding debt and debt obligations do not exist.
Please note, that I have documents to prove that the above applies to my case. So, I hope that this will not become one of these “I told you so” cases, where initial alerts do not result in any substantive investigative action, but years later a great deal of wrongdoing is being found.
Below is this case background information. I have been documenting this case on the Internet. In accordance with the previous documentation, please note that this is an open letter that I will publish on the Internet, on StopExtortion.org so that it is accessible to the general public and to other institutions. Further, please note that until this case is resolved, I need to keep records of the relevant correspondence. I am not able to record phone calls. Therefore, I can correspond in writing only, via regular mail.
This dispute with the U.S. Department of Education overlaps several areas: legal, financial, human rights and civil rights. I have been contacting, and will continue to contact, individuals and institutions from all of these areas, presenting evidence of wrongdoing by the U.S. Department of Education, until the U.S. Department of Education finally ends the unvalidated demands and issues a statement that I have been requesting.
However, even if the unvalidated demands end, based on the available information the fact remains that assets were maintained without having the necessary corresponding debt instruments that meet the commonly accepted criteria.
Do you consider such asset creating and maintaining to be acceptable?
From personal perspective I will say that I do believe that justice exists in the United States of America. Thus, I believe that eventually I will prevail. To me, these statements are highly meaningful.
All the information that I present here is inevitably presented from my point of view. However, I also try to present it as accurately and objectively as I can.
Further, while my opinion of the U.S. Department of Education is not high, the information presented here is above all based on the facts that are available to me.
If the U.S. Department of Education would work the same way, presenting the facts about the alleged debt and debt obligations, we would not have this dispute. Unfortunately, the U.S. Department of Education’s case is primarily based on opinions and generalizations, and statements like the following: “Schools frequently apply the funds from student loans to enrollment expenses, such as tuition, fees and other school charges. Students frequently do not directly receive the funds.” From this I am supposed to conclude, that the same applies to my case – and this is also supposed to be the validating proof, that my tuition and fees were paid with student loans, and not with other types of financial aid that I know I received.
In order to give its demands an appearance of legitimacy, the U.S. Department of Education has been trying to redefine, at its convenience, what constitutes debt and debt obligations, what are legally binding promissory notes, and what are legally binding contracts.
The U.S. Department of Education version of debt obligations, what are legally binding promissory notes, and what are legally binding contracts is: you owe us money, because we say so.
Further, the U.S. Department of Education is managed so, that people who represent this institution put the power of the federal government behind their demands, even when their demands are unvalidated.
I could have been one of the people who believes that the demands made by the U.S. Department of Education are legitimate, and I could have been making payments on debt that I do not owe. Years ago I did attend college, and I did apply for financial aid. Most importantly, it is the U.S. government that is making the monetary demands, thus, these demands must be accurate and legitimate, right?
However, in my case the monetary demands were several times higher than I possibly could have received as bank loans as a student, even if I would have received any bank loans. Thus, in December of 2011, when I received a collection letter, I requested debt validation. The U.S. Department of Education has made the latter process very difficult and time and labor consuming – and has not provided any actual debt validation, but refuses to close this case.
There may very well be other people, who in a similar situation choose to believe, that the demands made by the U.S. Department of Education are actually accurate and legitimate.
In such a situation, how does an individual, who may lack knowledge and resources, fight back a big and powerful system, like the U.S. Department of Education and it debt collector business partners are?
Most people probably give up. They either pay what is demanded from them, or they give up on the idea that they could pay off what is being demanded from them.
I will explain below the current situation further.
I came to the U.S. in 1989 as a political refugee from the Soviet Union. I attended state owned Rhode Island College between 1990 and 1996 as an honors student. According to publicly accessible sources the in-state cost of tuition to attend Rhode Island College from 1990 to 1996 ranged from $1,703 to $2,838 a year. For additional information see:
I received Rhode Island College Honors Scholarship, Pell Grant and work-study financial aid that covered the cost of my attending Rhode Island College.
As far as I know, as a student I did not qualify for bank loans because I was in the U.S. on a temporary visa when I first attended college, and then on Green Card until graduation, without any credit history, co-signer or collateral. Further, initially I did not have any work experience and work history either. While I was a student my income was extremely low and did not support borrowing from a bank tens of thousands of dollars.
However, the Department of Education insists that I also borrowed $46,354.00 as principal from Fleet National Bank, to which the Department of Education later added interest and fees, so that at this point the Department of Education is demanding from me over $135,000.00.
The amount of money that the Department of Education claims that I borrowed is several times higher than I possibly could have received, even if I would have borrowed money. As a student, I did not live on campus. The Department of Education is unable to explain, how the $46,354.00 supposedly was used or where did it go.
I have been requesting debt validation from the Department of Education from December of 2011, when I received a student loan collection letter.
None of the demands have been validated. There is no validation that I ever received any of the alleged loans either directly, or indirectly, as tuition support. Similarly, there is no validation that any legally binding documents exist.
The over two years long dispute with the Department of Education has so far resulted in identifying the following:
The Department of Education claimed, that it has my original promissory notes in its possession. Later it turned out that such documents simply do not exist.
Similarly, the Department of Education has stated that in 1997 Fleet Bank, a private lender, submitted insurance claims to a guaranty agency, and the guaranty agency made monetary payments to Fleet Bank.
However, the only records that the Department of Education is able to furnish as proof of these transactions are internal documents – for all practical purposes scratch papers – that any employee could have filled in at any point in time. If these transactions did actually occur, then why aren’t there any documents showing that Fleet Bank submitted claims, and that guaranty agency made payments to Fleet Bank? If these transactions actually took place, then why did the guaranty agency chose to retain for years irrelevant scratch paper, instead of records of actual transactions?
The Department of Education demands that I must prove that I did not receive bank loans – even though the demands have not been validated. Thus, I am asked to prove that I did not receive nonexistent loans.
Because of the special powers granted to the Department of Education, the Department of Education can go on and on with these circular demands.
The Department of Education operates under a business model, where it uses the powers granted to this institution and keeps making unvalidated demands and pressuring the former student to make payments on unvalidated debt, even though, based on the available information, the debt does not exist.
I graduated from college in 1996. In 2012 the Department of Education sent me what they claimed to be copies of my original Notice of Loan Guarantee and Disclosure Statements. However, it turned out that these statements were generated in 2012 by entering my current information into a computer system in 2012 – more than 15 years after I graduated from college.
Following the instructions that I received from Naomi Randolph, Special Assistant, Operations Services, Federal Student Aid, I submitted a FOIA request to the Department of Education first on 07/15/13. I received a response stating that I must sign a specific statement. I did so. Then I received yet another request to sign yet another statement, where I had to declare under penalty of perjury that the information that I have provided about this case is true to the best of my knowledge. I did sign that specific statement as well.
After my third FOIA request, I received the United States Department of Education FOIA REQUEST ACKNOWLEDGEMENT, which states that the date the request was received was August 20, 2013. The FOIA tracking number of my request is 13-00074-PA
The Department of Education has not explained what legal right did the Department of Education have to refuse to process my FOIA request until I had singed a statement under penalty of perjury.
I did receive a response to my FOIA request. The response, dated 03/11/14, states that my FOIA request “was forwarded to the appropriate office within the Department to search for documents that may be responsive to my request,” and the Office of Business Operations in FSA was “unable to locate any records responsive to my request.”
However, previously the Department of Education has stated that it has information on my receipt of grants. Thus, the FOIA response is in conflict with the information that the Department of Education has previously provided.
Accordingly, on 05/19/14 I contacted Office of Government Information Services (OGIS), National Archives and Records Administration. On 6/28/14 I received a response, stating that OGIS will assign a facilitator to this case (Case No. 201400566). This letter was dated 6/20/14, and was mailed on 6/25/14. At the time of writing this letter to you, I am still waiting for the relevant information from OGIS.
In June of 2014 I found out that the Department of Education had reported the unvalidated, non-existent student loans to Experian credit bureau, as if these were actual loans in collection.
To put things into perspective, I stared requesting debt validation in December of 2011 after I had received a student loan collection letter. At the time of my writing this letter, this debt validation dispute is ongoing, with no end in sight. Department of Education’s reporting of the fictional loans to a credit bureau started in 06/2012 and ended in 08/2013.
At the time when the Department of Education chose to report these fictional records as actual loans to a credit bureau, it must have been clear to the Department of Education, that there are no documents showing that I ever received any of these loans either directly or indirectly, as tuition support. Similarly, it must have been clear to the Department of Education, that there are no actual promissory notes or contracts involved here.
Because the loans do not exist, the Department of Education is not collecting any monthly revenue on them either.
Thus, I have to conclude that the reason that the Department of Education chose to report these fictional records as actual loans to a credit bureau was bullying. People at the Department of Education wanted to show how powerful they are and what I can do to me.
These fraudulently reported records prevent me from obtaining credit, from renting an apartment, and from seeking employment. Thus, these actions cause me harm.
On 06/23/14 I contacted the Department of Education and requested removal of these records. The Department of Education responded, refusing to remove the fraudulently reported records.
At this point, the nonexistent loans that the Department of Education reported to a credit bureau are being challenged through usage of relevant legal means. I am using assistance of a company that specializes on such transactions.
I have requested that the Department of Education validates that (1) I received the alleged student loans and that the relevant debt exists, and (2) that the Department of Education holds relevant valid legally binding promissory note debt instruments, and (3) that the Department of Education is the legal owner of the relevant alleged debt.
Throughout the over two years long debt validation dispute, the Department of Education has failed in all three areas.
The Department of Education is not exempt from debt validation, and the Department of Education does not have the legal right to force a past student loan applicant to make payments on an unvalidated debt.
Accordingly, I request that the Department of Education ceases and desists making any further monetary demands and states in writing that the Department of Education will not under any circumstances take any actions and will not make any further demands regarding the specific previously claimed alleged debt, and will not authorize any individual, company, organization or institution to take any actions or to make any kinds of further demands regarding the specific previously claimed alleged debt.
As I stated above, this dispute with the U.S. Department of Education overlaps several areas: legal, financial, human rights and civil rights. I will contact individuals and institutions from all of these areas, in order to close this case.
In accordance with case law, (citing)
Please note that the above citation is applicable to the time period when the alleged loans were made.
Accordingly, when the Department of Education becomes the holder of the promissory notes, it is not the original lender, nor the school involved, but the Department of Education that has to answer for actions related to originating and collecting the debt, as well as other potentially fraudulent aspects of an individual student loan cases.
In this case, legally binding promissory notes and debt either exist, or they do not exist.
If the Department of Education maintains a claim that it is the legal owner of legally binding promissory notes, I expect the Department of Education to furnish copies of the original legally binding promissory notes that are in accordance with Uniform Commercial Code (UCC) requirements for legally binding promissory notes. In that case, the Department of Education is also in the shoes of the lender. As lender, I expect the Department of Education to furnish proof, that the lending and borrowing transactions actually occurred and the corresponding debt obligations actually exist.
If the legally binding promissory notes do not exist, and there is no conclusive proof that the lending and borrowing transactions occurred, I expect the Department of Education to issue a statement clearly stating that it will end the unvalidated monetary demands.
Until then, I have to contact an ever increasing number of institutions and individuals, and during the next election cycle attempt to get national attention to the Department of Education’s operating practices, hoping that the next administration will follow more prudent policies. Thus, we have an everlasting dispute. Whom does that benefit?
I do believe, that it is in everybody’s interest to find a solution to this dispute. Accordingly, in addition to advising me on which institution would be best suited for looking into a possible accounting fraud case by the U.S. Department of Education, I hope that your involvement can help to move this dispute in the direction of finding a conclusion to it.