20 U.S.C. § 1097

Criminal penalties

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(a) In general

Any person who knowingly and willfully embezzles, misapplies, steals, obtains by fraud, false statement, or forgery, or fails to refund any funds, assets, or property provided or insured under this subchapter or attempts to so embezzle, misapply, steal, obtain by fraud, false statement or forgery, or fail to refund any funds, assets, or property, shall be fined not more than $20,000 or imprisoned for not more than 5 years, or both, except if the amount so embezzled, misapplied, stolen, obtained by fraud, false statement, or forgery, or failed to be refunded does not exceed $200, then the fine shall not be more than $5,000 and imprisonment shall not exceed one year, or both.

(b) Assignment of loans

Any person who knowingly and willfully makes any false statement, furnishes any false information, or conceals any material information in connection with the assignment of a loan which is made or insured under this subchapter or attempts to so make any false statement, furnish any false information, or conceal any material information in connection with such assignment shall, upon conviction thereof, be fined not more than $10,000 or imprisoned for not more than one year, or both.

Any person who knowingly and willfully makes an unlawful payment to an eligible lender under part B or attempts to make such unlawful payment as an inducement to make, or to acquire by assignment, a loan insured under such part shall, upon conviction thereof, be fined not more than $10,000 or imprisoned for not more than one year, or both.

(d) Obstruction of justice

Any person who knowingly and willfully destroys or conceals any record relating to the provision of assistance under this subchapter or attempts to so destroy or conceal with intent to defraud the United States or to prevent the United States from enforcing any right obtained by subrogation under this part, shall upon conviction thereof, be fined not more than $20,000 or imprisoned not more than 5 years, or both.

(e) Access to Department of Education information technology systems for fraud, commercial advantage, or private financial gain

Any person who knowingly uses an access device, as defined in section 1029(e)(1) of title 18, issued to another person or obtained by fraud or false statement to access Department information technology systems for purposes of obtaining commercial advantage or private financial gain, or in furtherance of any criminal or tortious act in violation of the Constitution or laws of the United States or of any State, shall be fined not more than $20,000, imprisoned for not more than 5 years, or both.

(Pub. L. 89–329, title IV, § 490, as added Pub. L. 99–498, title IV, § 407(a), Oct. 17, 1986, 100 Stat. 1491; amended Pub. L. 102–325, title IV, § 495, July 23, 1992, 106 Stat. 631; Pub. L. 116–251, § 2(a), Dec. 22, 2020, 134 Stat. 1129.)Editorial NotesPrior Provisions

A prior section 1097, Pub. L. 89–329, title IV, § 490, as added Pub. L. 96–374, title IV, § 451(a), Oct. 3, 1980, 94 Stat. 1453, related to criminal penalties, prior to the general revision of this part by Pub. L. 99–498.

Amendments

2020—Subsec. (e). Pub. L. 116–251 added subsec. (e).

1992—Pub. L. 102–325 amended section generally, inserting provisions relating to attempted offenses, wherever appearing, and in subsec. (a) inserting provisions relating to failure to refund and substituting provisions relating to $20,000 and $5,000 fines for provisions relating to $10,000 and $1,000 fines, respectively, in subsec. (b) substituting provisions relating to $10,000 fines for provisions relating to $1,000 fines, in subsec. (c) substituting provisions relating to $10,000 fines for provisions relating $1,000 fines, and in subsec. (d) substituting provisions relating to $20,000 fines for provisions relating to $10,000 fines.

Statutory Notes and Related SubsidiariesEffective Date of 2020 Amendment

Amendment by Pub. L. 116–251 effective 180 days after Dec. 22, 2020, see section 6 of Pub. L. 116–251, set out as a note under section 1018 of this title.

Guidance

Pub. L. 116–251, § 2(b), Dec. 22, 2020, 134 Stat. 1129, provided that: “The Secretary shall issue guidance regarding the use of access devices in a manner that complies with this Act [see Short Title of 2020 Amendment note set out under section 1001 of this title], and the amendments made by this Act.”

Effective Date of Penalties

Pub. L. 116–251, § 2(c), Dec. 22, 2020, 134 Stat. 1129, provided that: “Notwithstanding section 6 [set out as an Effective Date of 2020 Amendment note under section 1018 of this title], the penalties described in section 490(e) of the Higher Education Act of 1965 (20 U.S.C. 1097[(e)]), as added by subsection (a), shall take effect the day after the date on which the Secretary issues guidance regarding the use of access devices, as described in subsection (b) [set out as a Guidance note above].”

Notes of Decisions

Cited in 93 cases (12 in the last 5 years), 1983–2026 · leading case: United States v. Gary Ranum, 96 F.3d 1020 (7th Cir. 1996).

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United States v. Gary Ranum, 96 F.3d 1020 (7th Cir. 1996). · cites it 23× “false statements” federally-insured student loan funds in an amount not exceeding $200, a misdemeanor violation of 20 U.S.C. § 1097 (a) punishable by a term of imprisonment not to exceed one year and/or a maximum fine of $1,000.”

Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007). · cites it 2× “IV) (false statements to federal investigators); 20 U.S.C. § 1097 (a) (embezzlement of student loan funds); 18 U.”

Bousley v. United States, 523 U.S. 614 (1998). · cites it 2× “To the undeniable fact that the claim of "actual innocence" is much more likely to be available in guilty-plea cases than *634 in jury-trial cases, there must be added the further undeniable fact that guilty-plea cases are very much more numerous than jury-trial cases.”

Carrie A. McMellon Lori Dawn White Kathy D. Templeton Cheri Call v. United States of Am. United States Army Corps of Engineers, 387 F.3d 329 (4th Cir. 2004). · cites it 2× “into” 20 U.S.C. § 1097 (a) the “intent to defraud” requirement of 20 U.”

Bates v. United States, 522 U.S. 23 (1997). · cites it 3× “1491 , as added, 20 U. S. C. § 1097 (a) (1988 ed.), which declared it a felony “knowingly and willfully” to misapply student loan funds insured under Title IV of the Higher Education Act of 1965.”

United States v. Wells, 519 U.S. 482 (1997). · cites it 2× “§ 2349 (maximum two year prison term for making false statement of material fact for purposes of obtaining relief from injury under Trade Act of 1974); 20 U. S. C. § 1097 (b) (maximum one year prison term for knowingly and willfully concealing material information in connection…”

United States v. Elizabeth Kammer, 1 F.3d 1161 (11th Cir. 1993). · cites it 6× “HATCHETT, Circuit Judge: We reverse the misapplication convictions in this case because the government failed to prove that the appellant’s failure to refund Pell Grant monies constituted a misapplication under 20 U.S.C. § 1097 (a). I. FACTS During 1988, Elizabeth Kammer,…”

United States v. Thomas S. Ross & John Collori, 77 F.3d 1525 (7th Cir. 1996). · cites it 2× “Misapplication On counts 16-29, Ross was convicted of violating 20 U.S.C. § 1097 (a), which at the time of trial provided: Any person who knowingly and willfully embezzles, misapplies, steals, or obtains by fraud, false statement, or forgery any funds, assets, or property…”

United States v. Carlos Ezeta, 752 F.3d 1182 (9th Cir. 2014). · cites it 6× “*1183 OPINION TALLMAN, Circuit Judge: Defendant Carlos Javier Ezeta was indicted on four counts of financial aid fraud in violation of 20 U.S.C. § 1097 (a). Subsequently, the district court dismissed the indictment after concluding (1) that Eze-ta’s alleged actions did not…”

Muambo Martin Luther Kabongo (86-4078), Mesu Kabongo (86-4079) v. Immigr. & Naturalization Serv., 837 F.2d 753 (6th Cir. 1988). · cites it 4× “§ 1001 and one count of receiving funds by false statements in violation of 20 U.S.C. § 1097 (a). These criminal charges centered around an application which petitioner had made in May 1983 for a guaranteed student loan, a program administered by the United States Department of…”

United States v. Garrit Bates, 96 F.3d 964 (7th Cir. 1996). · cites it 3× “Following a recitation of the facts set out above, the indictment charges that on twelve separate occasions between January 15 and June 15, 1990, Bates knowingly and willfully misapplied specified amounts of federally guaranteed student loan funds, in violation of 20 U.S.C. §…”

United States v. Carole Diaz, AKA Carole M. Cefaratti, Carole Cefaratti-Diaz, 245 F.3d 294 (3rd Cir. 2001). “§§ 1341 and 1342, based on the mailing of falsified forbearance forms in April 1994; Count II charged federal student assistance fraud, in violation of 20 U.S.C. § 1097 (a), based on the school’s receipt of student loan and grant funds from October 1992 until July 1997; Count…”

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