The U.S. Department of Education has been making unvalidated monetary demands from me. The history of this case is documented on this website as Case 1.
This dispute overlaps several areas: legal, financial, human rights and civil rights.
In order to find a solution to this dispute, I am contacting other institutions and individuals, so that I can obtain input from a variety of sources. Previously I have contacted Office of Government Information Services (OGIS), National Archives and Records Administration, and the U.S. Department of Justice.
Below is an open letter to American Civil Liberties Union (ACLU). I sent this letter to Susan N. Herman, President of ACLU, and Anthony D. Romero, JD, Executive Director of ACLU.
I did receive a very considerate response from Susan N. Herman, President of ACLU, where she explained that she does not represent people directly with civil liberties cases, and what steps I could take regarding the possibility of having ACLU representation.
There are many, many more institutions and individuals to contact.
Most likely I will have to make dozens of contact attempts with different institutions and individuals. Most likely, some contacting instances will be more fruitful than others. Some of the previously contacted institutions I may have to contact several times, in order to receive input. However, eventually I will prevail, because what the U.S. Department of Education does is wrong on many levels. In the process, I will document the individual steps taken on this website.
Next I will address some of the financial aspects of this case and will contact relevant institutions and individuals. The focus of my inquiries will be the following question: how does the U.S. Department of Education create assets without having the actual necessary debt instruments? As my case demonstrates, the U.S. Department of Education enters assets into it’s books, and claims that it has the relevant debt instruments, but these claims, at least in my case, turned out to be completely false.
As the first step in the U.S. Department of Education possible accounting fraud investigation process, in the second half of October I will send a relevant letter to 10 officials and individuals. I will also publish that letter on this website.
Based on what I know about this case, the U.S. Department of Education attained computer records and partial copies of financial aid applications from a guaranty agency, entered fictional amounts into their books as assets, and then tried to turn these accounting entries into actual legitimate debt instruments and debt obligations, using extortion-like techniques.
Here’s the basic principle: if the U.S. Department of Education buys garbage as gold, it can blame the seller. However, if the U.S. Department of Education then starts asserting, that the garbage is actually gold, we have all the right to blame the U.S. Department of Education for making false statement – and, for creating fictional assets.
As far as I am concerned, at this point in time, the question how a guaranty agency, the previous holder of this non-existent debt, created assets without having the necessary actual debt instruments that would back the assets, is not particularly important. What is important, is to find answers to the question, how the culprit that makes monetary demands, using extortion-like techniques in the process – the U.S. Department of Education – created the assets in its books without having the necessary actual debt instruments.
So, if the U.S. Department of Education is unable to explain how it operates and creates assets without having the necessary financial instruments, so, that it also provides verifiable support material as proof of accuracy of its explanations (instead of meaningless generalizations), the U.S. Department of Education should be thoroughly audited. After all, large number of investors put their investments and their trust in the U.S. government bonds. If there are elements within the U.S. government structure, that create assets in an inappropriate manner, then the extent of such activities should be clarified, so that the investors have full relevant information and can make informed decisions based on that information.
There have been several large accounting scandals over the last couple of decades. Enron, WorldCom, to name a few. In most cases, at the core of the problems was inappropriate asset and fictional revenue source creating in books, without having the actual financial instruments or other types of assets to back up the claims. It seems, that the U.S. Department of Education operates in a similar manner!
If parts of the U.S. government are creating assets without having the actual financial instruments that should be backing them, and these operations go on with the full knowledge of top government officials, then that is a problem. (After several years of sending traceable letters to Mr. Arne Duncan, the U.S. Secretary of Education, he cannot claim that he is unaware of this case or the problems related to it.) How big problem is it, compared to well-known accounting scandals? Hard to say. That’s why we need totally impartial and through auditing of the U.S. Department of Education books and operations.
My guess is, that in this case the individual employees in the document processing workflow chains may do what they are asked to do, but the relevant processes are so poorly set up and managed, that they can lead to U.S. Department of Education creating assets in their books, for which they do not have actual necessary debt instruments. In some instances the relevant assets may correspond to actual lending and borrowing activities, in other instances they may be partially or completely baseless.
Obviously, it is wrong for the U.S. Department of Education to use extortion-like techniques, in order to turn the accounting entry assets into real ones, like they have been trying to do in my case. Further, obviously, it would be in the best interest of the investors to know how many instances there are, where the U.S. government assets are created without having the necessary financial instruments that should back the claims.
For me, the above steps are necessary parts of Case 1 dispute resolution processes. The U.S. Department of Education has put me in a situation, where I have to do the work for a prolonged period of time in order to find a solution to this dispute. People at the U.S. Department of Education have indicated repeatedly, that their position has not changed and that they have no interest in addressing constructively the problems surrounding this case.
I did not ask for this dispute, but step-by-step, I will do what’s necessary to find a solution to it, so that the unvalidated monetary demand making will end and the U.S. Department of Educational will issue a written statement, clearly stating that it will end the monetary demands.
A copy of the letter published below was delivered to the following people and institutions:
Susan N. Herman, President
American Civil Liberties Union (ACLU)
125 Broad Street, 18th Floor
New York NY 10004
Dear Susan Herman,
I am seeking your and your colleagues help with ending an abusive practice involving mental abuse, extortion, bullying, lack of fair an impartial review of debt obligations, and unjust restriction of movement (such as ability to rent an apartment or change jobs), all of which are inflicted by the U.S. Department of Education (“Department of Education”) for the purpose of unvalidated and unjustified monetary gain.
Obviously, past due student loans need to be collected. However, we cannot function effectively as a society, if everybody can redefine, at their convenience, what constitutes debt and debt obligations, what are legally binding promissory notes, and what are legally binding contracts, and those with the most resources can impose their version of reality on others. We have to follow relevant laws and commonly accepted concepts and definitions. However, the Department of Education has refused to do so.
Further, we cannot have a system, where a major governmental institution, the Department of Education, is able to make unvalidated monetary demands endlessly, year after year, without ever having to provide conclusive proof in accordance with the relevant laws and commonly accepted concepts and definitions, that debt and debt obligations actually exist.
Accordingly, I expect the Department of Education:
Further, there is a need for an impartial institution that reviews instances, where the Department of Education is not following the above principles.
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.
For over two and a half years, the Department of Education has been repeatedly demanding payments from me for loans that I never received. The demands have been accompanied with threats. Even though the Department of Education is unable to show that I ever received any of the money they demand from me, or that the Department of Education has any legally binding documents that I have signed, these demands go on and on – they never end. Under the current circumstances, the Department of Education can make unvalidated demands for years, even for decades.
Further, the Department of Education uses bullying techniques, and reported the fictional internal records to a credit bureau as if these were actual loans in collection. That prevents me from changing jobs and from renting another apartment.
Additionally, the Department of Education forces me as a former student to work endlessly on the debt validation case that the Department of Education should handle with its own resources.
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.
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.
With your help, I am hoping to find a way to convey to the Department of Education, that following laws and commonly accepted concepts and definitions is a better alternative than is ignoring them for the purpose of possible monetary gain.
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, I hope that your involvement can help to move this dispute in the direction of finding a conclusion to it.