Menu Close

Nimesh Shah, owner of Blue Star Learning, a technical training school in San Diego, was sentenced to 45 months in custody as a result of a multi-year scheme that defrauded the Department of Veterans Affairs out of almost $30 million in education benefits.

Shah was ordered to forfeit about $3 million and pay the VA more than $29 million in restitution. Shah’s wife Nidhi Shah, who was the vice president and director of education at the school, was sentenced to two years of probation as a result of lying to investigators in the course of the investigation into the school.

Shah took extraordinary efforts to deceive regulators from the Department of Veterans Affairs to ensure the school continued to receive VA funds.

Shah provided the VA with false documents, invented fake students and created fake student files. He provided spreadsheets with false employment information and fraudulent contact information for purported graduates of the school and their made up employers.

Eligible schools must be accredited yearly and as part of the process must show that graduates are successfully finding work in their field. To comply, Shah created fictional graduates and hired people overseas to pose as satisfied alumni with fake emails and phone numbers.

He purchased cellular telephones so that he and his employees could field VA regulator calls to purported employers of school graduates, and hired individuals overseas to pretend to be satisfied Blue Star Learning students in response to VA regulator emails.

In reality, the vast majority of actual graduates of the program were working in jobs not related to the training, prosecutors said.

As laid out in court records, Shah’s scheme appears to be one of the largest Post-9/11 G.I. Bill fraud cases that has been prosecuted around the country.

As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, as a result of Shah’s fraud, the VA lost $29,350,999.