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Tuesday, May 03, 2011
Stolen Money Still Missing
By James Monteleone
Journal Staff Writer
The New Mexico Educational Assistance Foundation has made little progress in getting back $700,000 stolen from an online bank account in July 2010.
The nonprofit foundation, also known as New Mexico Student Loans, manages loans worth $1.3 billion for 94,000 college and university students in New Mexico.
An undisclosed portion of the $700,000 was recovered soon after the July theft, said Elwood "Woody" Farber, the foundation president.
But several months into settlement negotiations with insurance companies and its banker, Bank of the West, the foundation is still missing the rest of the amount, he said.
Bank of the West spokesman Jim Cole declined to comment.
The FBI hasn't resolved the theft, either. An investigation is continuing, FBI spokesman Frank Fisher said.
Farber said more progress in resolving an insurance settlement is awaiting results from the FBI investigation.
"It's a long, dragged-out affair," he said. "And it will be, because I have no intention of getting in the way of the FBI on what they're doing."
Fisher declined to comment on how a criminal investigation could affect a financial settlement between the bank and its client.
The theft was the result of a foundation employee sharing account passwords and other information through an online scam, bank officials have said. No personal student identification information was lost in the theft.
The role of a foundation employee in the theft was accidental, and there was no suspicion of internal fraud, a bank spokesman said in September.
The money was taken from an account established to pay colleges and universities on behalf of student borrowers, but the theft of $700,000 did not affect any accounts this year, Farber has said.
Until recently, the foundation handled all federal student loans in New Mexico. Since July, the state's colleges and universities deal with the federal government directly, but the foundation still serves clients who received student loans before that.