Cedar Rapids man gets three-year sentence for student loan scam

A 22-year-old Cedar Rapids man was sentenced to three years in prison Monday in U.S. District Court for his participation in a student loan scheme involving recruitment of fake students to enroll at Kirkwood Community College.

Cory Bailey pleaded in June to one count of mail fraud. He was also ordered to make $5,854 in restitution to Kirkwood and $133,066 in restitution to the United States Department of Education, for a total of $138,920 in restitution.

In 2007, Bailey recruited potential fake students to sign up for classes at Kirkwood so he and two others involved in the scheme could access their information to apply for financial aid, according to the plea agreement information.

Bailey also created e-mail accounts for the students he recruited and gave them to the other two men who applied for federal financial aid, then enrolled the students in classes, according to the information.

Bailey and the others arranged for the loan checks to be mailed to post office boxes under their control, according to the criminal information. When checks would arrive, the men would contact the students and go with them to cash the checks. The men kept a substantial portion of the checks and gave some to the students.