Fraud Detection: Red Flags and Response Protocols

•15 min read

Most student veterans are honest beneficiaries entitled to their earned benefits. But fraud does occur, and VASCOs must recognize warning signs, follow proper investigation protocols, and implement prevention systems that protect benefit integrity without creating hostile environments for legitimate students.

The Uncomfortable Reality of Benefit Fraud

You became a VASCO to support veterans, not to police them. The idea of investigating students for fraud feels uncomfortable, perhaps even contrary to your mission. Yet VA education benefit programs lose millions annually to fraudulent claims, and institutions face serious consequences—including loss of GI Bill approval—when fraud occurs on their watch.

The vast majority of student veterans use benefits legitimately for their intended purpose. But some individuals—whether desperate, opportunistic, or deliberately criminal—attempt to game the system through falsified enrollment, inflated credit hours, misrepresented attendance, or other deceptive practices. Your responsibility isn't to assume every student is dishonest; it's to recognize legitimate warning signs and respond appropriately when they appear.

This guide provides frameworks for identifying potential fraud, conducting appropriate investigations within your authority, reporting to proper authorities, and building prevention systems—all while maintaining the supportive environment legitimate veteran students deserve. Effective fraud awareness protects honest students, preserves benefit program integrity, and shields your institution from regulatory consequences.

Common Fraud Patterns and Red Flags

Familiarize yourself with typical fraud indicators without becoming paranoid:

Enrollment and Attendance Fraud

  • Ghost Student: Enrolled to receive MHA but never attends classes, completes assignments, or participates
  • Early Withdrawal Pattern: Consistently enrolls full-time to receive MHA payment, then drops all or most courses after payment received
  • False Attendance Claims: Student or institution misrepresents attendance in classes student isn't actually attending
  • No-Show Enrollment: Registers for courses with no intention of attending, solely to generate benefit payments

Credit Hour and Enrollment Manipulation

  • Inflated Credit Hours: Requesting certification for more credits than actually enrolled, or courses that don't exist
  • Repeated Requests for Special Exceptions: Pressure on VASCO to certify courses that don't count toward degree or shouldn't be certified
  • Credit Banking: Enrolling in extra courses never intended to complete, just to maintain full-time status for MHA
  • Program Switching Scheme: Repeatedly changing majors to extend benefit entitlement through institutional technicalities

Document and Information Fraud

  • Falsified DD-214 or Service Records: Altered documents to show eligibility that doesn't exist
  • False Identity: Using another person's information or benefits
  • Misrepresented Status: False claims about active duty, reserve status, or disability rating to access specific benefits
  • Forged Signatures: Signing documents on behalf of officials without authorization

Institutional Complicity Red Flags

Sometimes fraud involves institutional actors, not just students:

  • Pressure from administrators to certify questionable enrollments to protect tuition revenue
  • Requests to backdate certifications or manipulate submission timing inappropriately
  • Aggressive veteran recruitment promising benefits that can't legitimately be delivered
  • Lax attendance tracking creating environment where enrollment fraud goes undetected

Systematic Fraud Detection Methods

Build detection into your regular processes:

Enrollment Verification Procedures

  • Cross-Reference Enrollment Data: Compare student's claimed enrollment to institutional system records before certifying
  • Verify Course Applicability: Check degree audit to confirm courses count toward student's program
  • Attendance Spot Checks: Periodically verify with faculty that certified students are actually attending, particularly if concerns arise
  • Mid-Term Enrollment Audit: Around weeks 6-8, verify students are still enrolled in certified courses
  • Last Date of Attendance Monitoring: Work with faculty and registrar to quickly identify students who stop attending

Pattern Recognition and Analytics

Track data that reveals concerning patterns:

  • Student history of late adds/early drops each term (pattern vs. isolated incident)
  • Frequent program changes without academic progress
  • Grade patterns showing consistent failures or withdrawals after MHA payment
  • Certification requests that don't align with previous academic trajectory
  • Students who only engage with your office during certification periods but never seek other services

Document Authentication

  • DD-214 Verification: Know what authentic DD-214s look like; verify through eBenefits or VA if document seems questionable
  • Eligibility Letter Validation: Cross-reference COE details with student's stated service history
  • Institutional Document Checks: Verify transcripts, degree audits, and enrollment confirmations come from legitimate institutional sources

Appropriate Investigation Protocols

When red flags appear, follow proper investigation procedures:

Initial Assessment and Documentation

Step 1: Document the Concern

  • Record specific observations, dates, and evidence
  • Screenshot or save relevant system data
  • Compile timeline of events or pattern
  • Note any witness observations or faculty reports
  • Maintain confidential investigation file separate from student's regular file

Step 2: Assess Severity and Plausibility

  • Could there be innocent explanation for observed behavior?
  • Is this potential fraud or simple student confusion/error?
  • Does this warrant investigation or just correction and education?
  • How much evidence supports fraud suspicion vs. alternative explanations?

Fact-Finding Within Your Authority

  • Review Available Records: Examine enrollment history, certification records, academic progress, attendance data you have access to
  • Consult with Registrar/Faculty: Request attendance verification or enrollment confirmation through normal channels
  • Check Institutional Systems: Compare student's claims to official enrollment and grade records
  • Review Communications: Examine email exchanges or documentation student has provided

What NOT to Do:

  • Don't conduct interrogations or accusatory confrontations
  • Don't access systems or records outside your authorized scope
  • Don't investigate alone if institutional policy requires team approach
  • Don't make fraud accusations to student before consulting appropriate authorities
  • Don't discuss suspected fraud with unauthorized parties

When to Escalate

Immediately consult supervisor and institutional authorities when:

  • You have substantial evidence suggesting fraudulent activity
  • Suspected fraud involves significant dollar amounts or multiple students
  • Fraud may involve institutional employees or systematic issues
  • You need access to records or investigative authority beyond your scope
  • Student becomes aware of investigation and requests explanation

Mandatory Reporting Requirements

Understand your legal and regulatory obligations to report suspected fraud:

VA Reporting Obligations

When to Report to VA:

  • Confirmed or strongly suspected benefit fraud by students
  • Pattern of problematic behavior suggesting systematic exploitation
  • Discovery of false documents or misrepresentation in certification process
  • Attendance issues affecting benefit entitlement

How to Report:

  • Contact VA Office of Inspector General (OIG) Hotline: 1-800-488-8244
  • Submit online report: www.va.gov/oig/hotline
  • Notify your assigned Education Liaison Representative (ELR)
  • Inform State Approving Agency as appropriate
  • Follow institutional reporting procedures simultaneously

Institutional Reporting

Report suspected fraud to institutional authorities:

  • Your immediate supervisor and department leadership
  • Institutional compliance officer or general counsel
  • Campus police or security if criminal activity suspected
  • Financial aid office if fraud involves other federal student aid
  • Dean of Students or student conduct office as appropriate

Confidentiality and Discretion

  • Maintain strict confidentiality during investigation
  • Report only to authorized parties with need-to-know
  • Document all communications related to fraud investigation
  • Avoid discussing with colleagues not involved in investigation
  • Protect whistleblowers from retaliation if fraud involves institutional actors

Fraud Prevention Systems and Controls

Build systems that deter fraud without creating oppressive environment:

Process Controls

  • Dual Verification: Require second-party review for high-risk certifications or unusual situations
  • Automated Cross-Checks: Implement system validations comparing certification requests to enrollment records
  • Attendance Monitoring: Establish clear last-date-of-attendance tracking procedures with faculty cooperation
  • Degree Audit Integration: Verify course applicability automatically through degree audit system
  • Exception Logging: Track all override decisions or policy exceptions for pattern analysis

Education and Awareness

  • Student Education: Clearly communicate benefit rules, consequences of fraud, and what constitutes violation
  • Acknowledgment Forms: Require students to sign statements confirming understanding of enrollment requirements and fraud penalties
  • Faculty Training: Educate faculty about importance of accurate attendance reporting and recognizing concerning patterns
  • Staff Awareness: Train all VASCO staff to recognize red flags and proper reporting procedures

Environmental Deterrence

Create environment where fraud is difficult and risks are clear:

  • Post visible information about fraud consequences in veteran services areas
  • Include fraud warnings in certification communications and materials
  • Make verification procedures known to discourage attempts
  • Demonstrate consistent enforcement when violations occur
  • Maintain professional, rule-consistent environment (reduces perception that exceptions are routine)

Balancing Fraud Awareness with Student Support

The hardest part of fraud awareness is maintaining supportive environment while remaining vigilant:

Avoiding Toxic Suspicion

  • Default to Trust: Assume good faith unless evidence suggests otherwise
  • Investigate Privately: Don't make students feel accused before evidence is gathered
  • Distinguish Error from Fraud: Most concerning situations are confusion or mistakes, not malicious fraud
  • Proportional Response: Minor issues deserve education and correction, not criminal investigation
  • Cultural Sensitivity: Some behaviors might reflect cultural differences or lack of understanding rather than intent to defraud

Protecting Innocent Students

Remember that fraud prevention systems can impact honest students:

  • Verification procedures that feel invasive or accusatory can damage trust
  • Delays in certification while investigating concerns affect innocent students' finances
  • Overly rigid policies may penalize students with legitimate unusual circumstances
  • Climate of suspicion can make veterans feel unwelcome or disrespected

Solution: Implement strong controls with professionalism, clear communication, and respect. Explain why verification procedures exist (protecting benefit integrity for all veterans) rather than making students feel targeted.

Vigilance Serves Veterans

It feels contradictory: you're supposed to support veterans, yet also watch for fraud. But these roles aren't actually in conflict. Fraud awareness protects honest veteran students by preserving benefit program integrity, preventing institutional scandals that jeopardize approval, and ensuring resources go to those genuinely pursuing education rather than those exploiting the system.

The VASCOs who balance this tension effectively recognize red flags without assuming guilt, investigate appropriately without overstepping authority, report legitimately concerning situations through proper channels, and maintain supportive environments while implementing reasonable controls. Fraud prevention isn't about treating every student as suspicious—it's about protecting a benefit system that serves those who've earned it.

Familiarize yourself with common fraud patterns, build detection into routine processes, understand reporting obligations, implement prevention systems proportional to risk, and maintain the professional judgment to distinguish genuine concerns from innocent misunderstandings. Done well, fraud awareness makes you a better advocate for the veteran students you serve.