News
Apr 21 2010
Memphis hair school owners charged with fraud
Two women who head a chain of cosmetology schools in Memphis and across the South were indicted Tuesday on charges that they stole nearly $500,000 in federal grants and education funds by falsifying student enrollments.
Penny Burns and Ruby Klyce of HD Adcock and Associate, Inc., are accused in the 14-count indictment of conspiracy to defraud the federal government, wire fraud, forgery, embezzlement and destruction or concealment of records.
Their corporation operates for-profit cosmetology schools, including New Wave Hair Academy, New Wave Hair Academy II and The Beauty Institute, all in Memphis.
The corporation also operates similar schools in Nashville and Jackson, Tenn., and in Charlotte, Greenville, Winston-Salem and Durham in North Carolina.
The schools were funded mainly through grants and loans from the U.S. Department of Education. They were paid by the number of students enrolled.
According to the indictment, Burns and Klyce were obligated to determine the amount of funds earned by students for the period attended and to refund to the government any money that had not been earned.
To maximize their federal funding, the indictment continued, Burns and Klyce deceived the education department by failing to report that some students had withdrawn from their cosmetology schools and by keeping grants and loans to which they were not entitled.
Overpayments from Pell Grants and other Title IV financial aid totaled at least $485,000 between June of 2006 and January 2009, authorities said.
Burns is the chief executive officer and Klyce is the executive director of HD Adcock. They could not be reached Tuesday.
Penny Burns and Ruby Klyce of HD Adcock and Associate, Inc., are accused in the 14-count indictment of conspiracy to defraud the federal government, wire fraud, forgery, embezzlement and destruction or concealment of records.
Their corporation operates for-profit cosmetology schools, including New Wave Hair Academy, New Wave Hair Academy II and The Beauty Institute, all in Memphis.
The corporation also operates similar schools in Nashville and Jackson, Tenn., and in Charlotte, Greenville, Winston-Salem and Durham in North Carolina.
The schools were funded mainly through grants and loans from the U.S. Department of Education. They were paid by the number of students enrolled.
According to the indictment, Burns and Klyce were obligated to determine the amount of funds earned by students for the period attended and to refund to the government any money that had not been earned.
To maximize their federal funding, the indictment continued, Burns and Klyce deceived the education department by failing to report that some students had withdrawn from their cosmetology schools and by keeping grants and loans to which they were not entitled.
Overpayments from Pell Grants and other Title IV financial aid totaled at least $485,000 between June of 2006 and January 2009, authorities said.
Burns is the chief executive officer and Klyce is the executive director of HD Adcock. They could not be reached Tuesday.
