Rachel Crawford, 38, of Fort Wayne, Indiana, is facing federal charges for allegedly masterminding a financial aid fraud scheme at Masters of Cosmetology, stealing federal education funds meant for students. The U.S. Attorney for the Northern District of Indiana, David Capp, confirmed the filing of an information accusing Crawford of obtaining federal financial funds through fraud and materially false statements under the Family Federal Education Loan (FFEL) program, administered by Sallie Mae.
As financial aid director at the now-notorious cosmetology school, Crawford allegedly manipulated student records and falsified eligibility data to siphon government-backed loans. The FFEL program, designed to support legitimate students, was exploited under her watch—funneling illegally obtained funds into the institution while burdening unqualified applicants with debt they never should have carried.
Crawford has entered into a binding agreement to plead guilty to the charge. Her cooperation with federal investigators has been substantial, authorities say, leading directly to the earlier conviction of Kaydean Geist, owner of Masters of Cosmetology. That probe peeled back layers of corruption within the school’s administration, exposing a systemic abuse of federal student aid infrastructure.
As a direct result of the investigation, the U.S. Department of Education moved to cancel numerous FFEL loans issued through Sallie Mae under false pretenses. Hundreds of students—many of whom never completed programs or were improperly enrolled—will be relieved of debt that should never have been authorized, a rare win in the shadowy world of for-profit school fraud.
Crawford is scheduled to appear before Magistrate Judge Susan Collins for a change of plea hearing at a date to be determined. While she has agreed to plead guilty, no sentence has been imposed. The court will determine penalties in accordance with federal sentencing statutes and the Federal Sentencing Guidelines, which could include prison time, fines, and restitution.
The investigation was jointly conducted by the Federal Bureau of Investigation, Indiana State Police, and the U.S. Department of Education’s Office of Inspector General. Assistant U.S. Attorney Tina L. Nommay is prosecuting the case. The U.S. Attorney’s Office stressed that an information is merely an allegation, and all defendants are presumed innocent until proven guilty—though Crawford’s pending guilty plea suggests the evidence is overwhelming.
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Key Facts
- State: Indiana
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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