Thank you for your response.
The loans were subsidized Stafford loans through the federal government. The summer loan, completely subsidized, had already been awarded to him, unbeknownst to me, when I was threatened with contempt for not paying for summer school expenses and for not paying all costs associated with an off-campus apartment with a 12-month lease. At the time of the threats of contempt, leading to my having to file the Motion for Clarification and fight it in court, my son and his mother already knew about the subsidized loans for the summer and fall semester, even as we sat in the courtroom.
I paid all costs for fall, 2005, with funds from my wife's 529 plan, originally set up for my three stepchildren. I absolutely did rely on these funds being used to pay off-campus room/board expenses. I cautioned both children about the importance of keeping all receipts. In December, 2005, my ex-wife walked into my bank and "cashed" a $4,000.00 check meant for college expenses for Spring Semester, 2006.
Because of this, and other red flags, I began asking in January, 2006 for absolute proof of expenditures with the money provided. My requests were ignored, and my son refused to provide his "pin number" to his college account, denying me access. Numerous letters were sent, asking for cancelled checks and receipts, and access. I suspected that either he wasn't living in the apartment and therefore not paying rent, or that he had received a grant.
It became a full-time job trying to figure it all out in the face of all the deception. My wife, whose funds were misused, is now acutely depressed and under the care of a psychiatrist because of the toll it has taken on our marriage and the fact she feels helpless to do anything about what they've done. She was in school trying to get her Nursing degree and quit because she couldn't concentrate enough to do her homework. I have promised to make it right, and am paying her back, but she wants the Ex and my son to face consequences for what they've done.
Finally, after a strongly-worded letter to my Ex-wife in April, reminding her once again that our divorce decree requires her to provide me with documentation, information, and receipts when reasonable requests are made, she sent me a copy of my son's account (only for Spring, leaving out Summer and Fall), and that is when I found out about the partially subdized Stafford loan. After several more letters, they gave me the fall information, and then, a week ago when I refused to pay another dime without substantiation of funds provided and the pin number, I received the pin number and a typed "receipt" from the landlord for the preceding year. So, it took fourteen months to be provided with the information about the fully subsidized Stafford loan awarded in May, 2005.
Due to the fact that the loans were disbursed in 2005, obviously based on a 2004 tax return/2005 FAFSA, and they were subsidized, I strongly suspect that the FAFSA was falsified. Between child support for my daughter in 2004 (and part of 2005), including major out-of-pocket medical expenses for surgery on her nose not covered by insurance, car insurance and car payments for both kid's cars, and college expenses, the support for 2004 was $30,000. My Ex is a dental hygenist and makes a good living. She denied knowing about the loans, even though she had to have signed the FAFSA; both kids are her legal dependents.
I asked the 529 plan representive to please track down the check disbursed in August, 2005. She called last week to say it appeared to have been "cashed" at my son's bank; that is the only way I know what happened to it. The "refund" from the overage in loans/scholarships was received the same day. After some research (my son tells me nothing; the relationship is now completely severed due to all of this), I confirmed that his new car was purchased exactly two weeks later, for exactly the amount of money that, added together, equaled the 529 Plan funds and the refund from the school.
My Ex-wife wrote in a nasty note in January that she had instructed my children to ignore the 1099Q's received by my children reported to the IRS by the 529 plan, because they were "a gift". With absolutely NO substantiation, except for a "receipt" by the landlord (my son's friend's father and mother...their son shared the apartment), two "cashed" checks, one within two weeks of buying a car (a camaro) and the other one cashed just prior to my son's 1974 vintage Corvette being refurbished and all of a sudden on the road instead of in pieces in his mother's garage (I saw it by accident on the road in March...there aren't any other cars like that, that color, in our area), I am 100% sure that my funds were used on non-educational espenditures. My son even admitted to me, when I pressed him about the matter at a relative's funeral in June, that all refund money was used "for cars".
Since I now I access to both kids' college accounts, I know that they both have more loans, so I know that there was also a 2006 FAFSA. My Ex-wife's house was sold for $500,000.00 (250,000 equity) January 27...I'm sure within a week or two of the FAFSAs being signed, and then she remarried and moved to her (now) husband's home. If that was unreported, as well as the funds from the 529 plan, and of course I have no idea, the 2006 FAFSA would have been falsified as well. I get the impression that anyone who would walk into my bank and "cash" a $4,000 check, and support her son as he (and she) lied to his father, would have the nerve to do just about anything, thinking there is no way she could get caught.
Two weeks ago, all documentation we had, including all copies of 529 plan statements and a speadsheet detailing support/expenditures, and unsubstantiated funds was sent to the OIG at the Department of Education, alleging suspected FAFSA fraud. Forms and documentaion were also sent to the IRS fraud unit, alleging suspected funds given to my Ex-wife in excess of college expenses, and possible unreported (by my son) taxable income due to 529 plan money used for non-qualified expenses. It has been confirmed by the 529 plan that off-campus room/board would be a qualified college expense.
My questions now:
1. Given what I've said, how does one prove fraud and "theft by conversion?"? My wife and I feel strongly that is what has occurred here. She is not interested in a civil suit, but is considering criminal charges when she is stronger. Obviously, the toll this is taking on the both of us is incredible; her, because it was her children's college money, and me, because now I have turned my wayward son into two government agencies.
2. I realize that one cannot throw out a settlement agreement unless the original information was false, but IF there has been criminal fraud/theft, is there ANY precedent for at least a modification in view of these kind of unusual circumstances?
Thank you so much for reading this extremely long post about this convoluted story...I haven't even told you about my son's astronomical car insurance, multiple accidents and tickets and the tempory loss of his license and altered MVR report...but I'll save that for another day!
John H.
The loans were subsidized Stafford loans through the federal government. The summer loan, completely subsidized, had already been awarded to him, unbeknownst to me, when I was threatened with contempt for not paying for summer school expenses and for not paying all costs associated with an off-campus apartment with a 12-month lease. At the time of the threats of contempt, leading to my having to file the Motion for Clarification and fight it in court, my son and his mother already knew about the subsidized loans for the summer and fall semester, even as we sat in the courtroom.
I paid all costs for fall, 2005, with funds from my wife's 529 plan, originally set up for my three stepchildren. I absolutely did rely on these funds being used to pay off-campus room/board expenses. I cautioned both children about the importance of keeping all receipts. In December, 2005, my ex-wife walked into my bank and "cashed" a $4,000.00 check meant for college expenses for Spring Semester, 2006.
Because of this, and other red flags, I began asking in January, 2006 for absolute proof of expenditures with the money provided. My requests were ignored, and my son refused to provide his "pin number" to his college account, denying me access. Numerous letters were sent, asking for cancelled checks and receipts, and access. I suspected that either he wasn't living in the apartment and therefore not paying rent, or that he had received a grant.
It became a full-time job trying to figure it all out in the face of all the deception. My wife, whose funds were misused, is now acutely depressed and under the care of a psychiatrist because of the toll it has taken on our marriage and the fact she feels helpless to do anything about what they've done. She was in school trying to get her Nursing degree and quit because she couldn't concentrate enough to do her homework. I have promised to make it right, and am paying her back, but she wants the Ex and my son to face consequences for what they've done.
Finally, after a strongly-worded letter to my Ex-wife in April, reminding her once again that our divorce decree requires her to provide me with documentation, information, and receipts when reasonable requests are made, she sent me a copy of my son's account (only for Spring, leaving out Summer and Fall), and that is when I found out about the partially subdized Stafford loan. After several more letters, they gave me the fall information, and then, a week ago when I refused to pay another dime without substantiation of funds provided and the pin number, I received the pin number and a typed "receipt" from the landlord for the preceding year. So, it took fourteen months to be provided with the information about the fully subsidized Stafford loan awarded in May, 2005.
Due to the fact that the loans were disbursed in 2005, obviously based on a 2004 tax return/2005 FAFSA, and they were subsidized, I strongly suspect that the FAFSA was falsified. Between child support for my daughter in 2004 (and part of 2005), including major out-of-pocket medical expenses for surgery on her nose not covered by insurance, car insurance and car payments for both kid's cars, and college expenses, the support for 2004 was $30,000. My Ex is a dental hygenist and makes a good living. She denied knowing about the loans, even though she had to have signed the FAFSA; both kids are her legal dependents.
I asked the 529 plan representive to please track down the check disbursed in August, 2005. She called last week to say it appeared to have been "cashed" at my son's bank; that is the only way I know what happened to it. The "refund" from the overage in loans/scholarships was received the same day. After some research (my son tells me nothing; the relationship is now completely severed due to all of this), I confirmed that his new car was purchased exactly two weeks later, for exactly the amount of money that, added together, equaled the 529 Plan funds and the refund from the school.
My Ex-wife wrote in a nasty note in January that she had instructed my children to ignore the 1099Q's received by my children reported to the IRS by the 529 plan, because they were "a gift". With absolutely NO substantiation, except for a "receipt" by the landlord (my son's friend's father and mother...their son shared the apartment), two "cashed" checks, one within two weeks of buying a car (a camaro) and the other one cashed just prior to my son's 1974 vintage Corvette being refurbished and all of a sudden on the road instead of in pieces in his mother's garage (I saw it by accident on the road in March...there aren't any other cars like that, that color, in our area), I am 100% sure that my funds were used on non-educational espenditures. My son even admitted to me, when I pressed him about the matter at a relative's funeral in June, that all refund money was used "for cars".
Since I now I access to both kids' college accounts, I know that they both have more loans, so I know that there was also a 2006 FAFSA. My Ex-wife's house was sold for $500,000.00 (250,000 equity) January 27...I'm sure within a week or two of the FAFSAs being signed, and then she remarried and moved to her (now) husband's home. If that was unreported, as well as the funds from the 529 plan, and of course I have no idea, the 2006 FAFSA would have been falsified as well. I get the impression that anyone who would walk into my bank and "cash" a $4,000 check, and support her son as he (and she) lied to his father, would have the nerve to do just about anything, thinking there is no way she could get caught.
Two weeks ago, all documentation we had, including all copies of 529 plan statements and a speadsheet detailing support/expenditures, and unsubstantiated funds was sent to the OIG at the Department of Education, alleging suspected FAFSA fraud. Forms and documentaion were also sent to the IRS fraud unit, alleging suspected funds given to my Ex-wife in excess of college expenses, and possible unreported (by my son) taxable income due to 529 plan money used for non-qualified expenses. It has been confirmed by the 529 plan that off-campus room/board would be a qualified college expense.
My questions now:
1. Given what I've said, how does one prove fraud and "theft by conversion?"? My wife and I feel strongly that is what has occurred here. She is not interested in a civil suit, but is considering criminal charges when she is stronger. Obviously, the toll this is taking on the both of us is incredible; her, because it was her children's college money, and me, because now I have turned my wayward son into two government agencies.
2. I realize that one cannot throw out a settlement agreement unless the original information was false, but IF there has been criminal fraud/theft, is there ANY precedent for at least a modification in view of these kind of unusual circumstances?
Thank you so much for reading this extremely long post about this convoluted story...I haven't even told you about my son's astronomical car insurance, multiple accidents and tickets and the tempory loss of his license and altered MVR report...but I'll save that for another day!
John H.