Beauty School "Fake Out" Raided in Federal Fraud Probe

School earned nearly $4 million in Pell grants since 2006, report finds

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    NEWSLETTERS

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    The school received nearly $4 million in Pell grants since 2006.

    A tiny beauty school in New York's Chinatown has been raided by federal agents after getting an outsized $4 million in government aid in as many years.
           
    Agents from the departments of education and labor seized boxes of documents Friday at the USA Beauty School.

    The small business first came under scrutiny two years ago after authorities received an anonymous complaint about the fortune in federal aid.
           
    "It's a hole in the wall that receives millions of dollars," one unnamed agent told The New York Post.

    According to court papers filed by the federal Education Department, an undercover FBI agent posing as a student was asked to falsify a tax return in order to boost the amount of federal aid the school would get.

    The school earned nearly $4 million in Pell grants since 2006 and netted more than $70,000 in federal stimulus funds in the last year alone, reports the Post.

    On its website, the school describes its objectives as, "to prepare each student by providing the best training so that students are able to take and pass the New York State Board examinations and to assist students in making the transition from school to employment in the Cosmetology field."
           
    The school's director of financial aid has refused comment.