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Wednesday, January 10, 2007

Family members sentenced for tax, financial aid scam

An Indiana woman and her two children cheated the government out of thousands of dollars.

An Indiana woman and her two adult children were sentenced to prison on Tuesday for cheating the government out of tens of thousands of dollars.

Karen Sue Justus, 58, of Fort Wayne, Ind., and her daughter, Joy M. Justus, 33, will spend one year and one day in prison for their roles in a financial aid and tax scam, said Heidi Coy, spokeswoman for the U.S. Attorney's Office in Roanoke.

Karen Justus' son, 32-year-old Jason Justus, who was incarcerated in the Pulaski Correctional Unit when the crimes occurred in 2003, will spend almost two years in prison, Coy said.

While Jason Justus was housed in Pulaski, the three Justuses came up with a plan to submit fake statements to the Internal Revenue Service and false applications for student aid to the Department of Education, prosecutors said.

The family used Jason Justus' name and the names of at least 14 other inmates at the jail on the fraudulent documents. In exchange, they promised the inmates payment.

In one case, they used the name of a man who was dead, officials say.

The student aid applications were for classes at Ivy Tech State College in Indiana and Owens State Community College in Ohio, but nobody at the Pulaski jail was taking online courses at those schools.

After asking for the maximum amount of financial aid, the Justuses would deposit what they got into their Indiana bank account. Only small payments of $150 to $200 were sent to inmates, and Jason Justus' attorney, David Damico, has said his client only received about $1,500 for his involvement.

None of the inmates was charged in the case.

In October, each of the three pleaded guilty to one count of filing false income tax returns and applications for student assistance.

The three were ordered Tuesday to jointly pay $105,964 in restitution to the Department of Education and $19,361 to the Internal Revenue Service.

Because Karen Justus and her daughter live together in a home with five children who need a caregiver, U.S. District Judge James Turk said he will allow Joy Justus to serve her prison sentence first.

Ten days after she is released, her mother must report for prison.

Their sentences were fashioned as one day more than a year because prisoners serving more than 12 months in prison are eligible for reduced sentences for good behavior, Coy said.

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