Cynthia Denise Melvin, a 59-year-old resident of Fayetteville, North Carolina, has entered a guilty plea to charges of conspiracy to commit wire fraud. This plea is in connection with a scheme that defrauded the federal student aid program out of millions of dollars. At her upcoming sentencing later this year, Melvin could face up to 20 years in prison, along with a $250,000 fine and three years of supervised release. Restitution will also be required.
Court documents reveal that between 2016 and 2023, Melvin orchestrated and led a network involving over 70 "straw students" who fraudulently applied for financial aid at various community colleges across the Middle and Eastern Districts of North Carolina. The fraudulent activities resulted in more than $5 million being improperly disbursed as financial aid.
The Federal Student Aid (FSA), part of the U.S. Department of Education, oversees programs providing financial assistance for post-secondary education through grants, loans, work-study funds, and other forms of support. FSA also manages the Free Application for Federal Student Aid (FAFSA). After tuition fees are covered by an award from a school, any leftover balance is refunded to students for educational expenses.
Melvin collected personal identifying information from straw students in North Carolina to submit applications at targeted schools. She created the appearance that these individuals were attending classes and completing coursework by impersonating them in communications with schools. FAFSA forms were submitted under false pretenses via FSA's website without revealing her role as document preparer. Consequently, funds were wired from the United States Treasury to these institutions while refunds were issued back to straw students after tuition costs were deducted; Melvin received significant portions of these refunds.
During a search warrant execution at Melvin’s home by Office of Inspector General investigators, evidence was found documenting how she operated this scheme including personal data on straw students alongside coursework records plus FSA account details such as usernames/passwords together with banking information.
Daniel P. Bubar—Acting United States Attorney for Eastern District North Carolina—announced this development following Chief Judge Richard E Myers II accepting Melvin's plea agreement; it was investigated by U.S Department Education’s Office Inspector General while Assistant United States Attorney Adam F Hulbig handled prosecution duties related court documentation/information accessible via either U S District Court Eastern District NC website or PACER using Case No: 5:25-CR-14-M
