Three Charged with $20 Million Fraud in Ohio Free College Benefit Program
Federal prosecutors announced on Oct. 8, 2026 that a Jefferson County grand jury indicted Michael Perik, Nicole Rowe Colclasure and Michael Geoghegan for allegedly stealing about $20 million from the Free College Benefit Program at Eastern Gateway Community College.
The alleged fraud targeted Pell grants and other federal financial‑aid funds, using “fraudulent reimbursements and illegal incentive payments,” according to Ohio State Auditor Keith Faber. The misuse of resources intended to help low‑income students represents a significant loss of taxpayer money and raises fresh concerns about the integrity of federal aid programs.
Faber said the program had boosted the college’s enrollment, drawing many out‑of‑state and online students. He added,
“These public resources were supposed to help disadvantaged students in an area of the state where educational opportunities were scarce. Instead, it appears these individuals took advantage of their positions, and students were left out in the cold.”
Perik is accused of channeling money through four for‑profit companies he owned, which controlled attendance verification, enrollment, fees and other critical functions at the college. The arrangement allegedly allowed the defendants to divert federal funds into private accounts.
U.S. Under Secretary of Education Nicholas Kent condemned the scheme, stating,
“It is a disgrace that individuals may have taken advantage of the federal student aid programs that are intended to help students access postsecondary education. We are proud to stand with Ohio Auditor Faber and his team to hold fraudsters accountable and protect the integrity of critical resources that millions of students and families rely on.”
Eastern Gateway Community College, a public two‑year institution overseen by the Ohio Department of Public Education, was closed in 2025 after financial difficulties and the fallout from the scandal. Authorities indicated that the indictment marks the latest step in a broader effort to safeguard federal education funds.
The three defendants now face federal charges that could lead to significant prison time and restitution. Prosecutors say the case will proceed through the courts, with investigators continuing to examine how the fraudulent reimbursements were processed and whether additional parties were involved.
