A woman in Chesapeake, Va., pleaded guilty Wednesday after setting up a fake beauty school to scam the Department of Veterans Affairs (VA) out of millions.
Forty-five-year-old Katherine Grobes ran an educational institute called the College of Beauty and Barber Culture, which the VA approved to provide training to veterans. The school was also certified for veterans taking advantage of their GI benefits, according to the Department of Justice.
Grobes told the VA that her school provided full-time education to hundreds of vets.
But the school actually turned out to be a sham. Most veterans received barely any training at all. Nevertheless, she proceeded to collect $4.5 million dollars from October, 2011, to September, 2016, in GI bill payments.
To create the impression of a full-time environment, Grobes told students to sign in and out, in order to make it appear as though they were in attendance for the entire day. With these fake records, Grobes persuaded the VA to offer GI bill tuition payments for veterans at the beauty college.
Signing in and signing out to fake attendance was so common that veterans even developed a slogan for the practice: “We’re here to earn, not to learn.”
More than 350 veterans attended the school. Out of the 350 who attended, only 11 even attempted the state licensing exam. And out of the 11, just seven passed on to get a barber or cosmetology license.
While students did receive some instruction, there were no graded tests, and there were no projects.
Grobes’ husband, William, was also in on the scam. He’s set to be sentenced on March 8. He faces a prison term of up to 20 years. Grobes will be sentenced on March 10 and faces a term of up to five years, after pleading guilty to conspiracy to commit wire fraud.
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