Parvesh Singh, 64, pleaded guilty in federal court to fraudulently obtaining more than $92,000 using the names of students who did not the meet the requirements for full-time enrollment or never attended classes.
As part of a plea agreement reached Monday, he is expected to testify against former Morris Brown President Delores Cross, whose trial is scheduled to begin May 1.
Had he gone to trial, Mr. Singh could have received five years imprisonment, along with three years supervised release and been ordered to pay as much as $250,000 in penalties, for the one count to which he pleaded guilty. If he cooperates with prosecutors, the government has recommended he serve whatever sentence he receives at home under house arrest because of "extraordinary physical impairment."
During his hourlong hearing, Mr. Singh detailed for 15 minutes a list of medications he is currently taking to address conditions varying from high blood pressure and cholesterol to glaucoma, diabetes, depression and leg pain.
Under a December 2004 federal indictment, Mr. Singh faced 34 counts of fraud. The remaining counts will be dismissed as part of the agreement. According to a December 2004 indictment, Mr. Singh and Ms. Cross fraudulently obtained $3.4 million in federally insured student loans and Pell grants to cover in part a $3.3 million credit debt and school expenses.
Mr. Singh's attorneys emphasized he did not directly benefit from the stolen funds.
Morris Brown never should have received the money, prosecutors said, because loans were applied for in the names of students who never attended the college, had already left the college or attended part-time.
Most of the ineligible students had no knowledge the loans had been applied for in their names, or that they would be expected to repay, court documents claim. Ms. Cross and Mr. Singh also hid the fraud from the school's board of trustees, and Morris Brown workers have helped with the investigation, authorities said.
At the hearing, prosecutors explained the fraud scheme and Mr. Singh verified the details under oath.
The government detailed a process of "blanket enrollment," where Mr. Singh would enroll 70 percent of students listed as registered for classes, but not paid - making them not officially enrolled.
"I knew that some of the students are not on campus," Mr. Singh told Northern District Federal Court Judge Julie Carnes. "The school had serious cash flow problems. I knew that no money will be sent back. I was aware of that fact."
Asked by the judge whether he was also aware that he was putting unwitting students in a financial bind - saddling them with loans they would be forced to repay for classes they never took - Mr. Singh responded, "I knew that, but I did not take that far at that point."
Under Ms. Cross - who was first interim president from November 1998 to July 1999, then president of Morris Brown from July 1999 to February 2002 - the college received between $15 million and $25 million a year in financial aid. Nine of 10 students at the school received some form of financial assistance. She resigned in February 2002 when allegations of mismanagement and fraud surfaced and Morris Brown lost its accreditation.
Enrollment plunged from 2,000 students to as low as 80.
He was hired as a financial aid consultant in October 1998, and became the school's director of enrollment services and financial aid director in February 2002.
Prosecutors said his dual roles provided Mr. Singh "opportunities to manipulate student enrollment and financial aid data." He was fired later that month soon after Ms. Cross' departure.
No date has been set for Mr. Singh's sentencing.