Head Of Pleasanton 'Sham University' Accused Of Fraud
PLEASANTON (CBS SF) -- The president of a defunct online university described by authorities as a sham was arrested in Pleasanton Monday on federal charges of fraud, money laundering and harboring undocumented immigrants.
Susan Xiao-Ping Su, 41, president of Tri-Valley University, was arrested at her home in Pleasanton and was due to make an initial appearance in federal court in Oakland Monday on an indictment filed last week, according to U.S. Attorney Melinda Haag.
Haag said Su is accused of obtaining several million dollars in purported tuition fees by helping foreigners obtain fraudulent student visas.
"(The) indictment alleges a visa fraud scheme through which the defendant accrued millions of dollars and took advantage of others' eagerness to come to the United States," Haag said.
The indictment issued by a federal grand jury in Oakland on Thursday charges Su with 33 counts, including conspiracy to commit visa fraud, wire fraud, harboring undocumented immigrants and laundering $3.2 million in fraud proceeds, Haag said.
The unaccredited online university based in Pleasanton was founded by Su in 2008 and was shut down in March on the order of the California Bureau of Private Postsecondary Education, according to the university's website.
In a one-page announcement on the website, Su says the institution has closed and tells students, "The final message from Ms. Su as TVU's President is an ENCOURAGEMET (sic) to you all to MOVE ON!"
In a separate civil lawsuit filed in federal court in San Francisco by Haag's office in January, federal attorneys called Tri-Valley University "a sham university" aimed at helping foreigners obtain illegal student visas.
The lawsuit, which is pending, seeks forfeiture of four properties in Pleasanton and a fifth in Livermore that were allegedly bought with proceeds of the fraud.
A lawyer who represented Su in the civil case and in the state proceeding, David Billingsley, of Hayward, was not immediately available for comment.
The civil lawsuit said 95 percent of the students were from India and that students paid $2,700 per semester. By September 2010, the university had enrolled 1,555 students, providing an estimated revenue of nearly $4.2 million for that semester.
More than half the 939 students enrolled the previous semester, as of May 2010, were registered at the same address in a single apartment in Sunnyvale, the lawsuit alleged.
The civil lawsuit said a U.S. Immigration and Customs Enforcement investigation showed that the institution lacked the credentials needed for an unaccredited university to enable its students to receive visas.
The requirement is for agreements from three accredited colleges or universities saying that they would accept credits given by the unaccredited university. At least two such agreements provided by Su turned out to be false, the lawsuit said.
The lawsuit also alleged the university engaged in a pyramid scheme in which people who were enrolled could collect fees of up to 20 percent of the tuition of new students whom they referred to the university.
ICE Director John Morton issued a statement from Washington, D.C., today saying, "Student visas are intended to enable people from around the world to come to this country to enrich themselves with the wealth of educational opportunities available here.
"ICE Homeland Security Investigations will aggressively pursue those who exploit America's legal immigration system solely for their personal gain," Morton said.
The federal criminal charges against Su each carry penalties ranging from one to up to 20 years in prison, if she is convicted.
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