• October 1, 2014

Former Education Dept. Official to Plead Guilty Over Stock Holdings in Lender

Federal prosecutors have filed charges against Matteo Fontana, a former senior financial-aid official in the Education Department who in 2007 was found to be holding stock in one of the student-loan companies he oversaw, and Mr. Fontana has agreed in a plea bargain to pay a fine as high as $115,000, according to documents filed in the U.S. district court here.

Mr. Fontana, formerly manager of the Financial Partners Division of the Education Department's Federal Student Aid office, was reported in 2007 to possess at least 10,500 shares of stock, worth at least $100,000, in the Education Lending Group, the parent company of Student Loan XPress—one of the companies he was responsible for regulating. Further disclosures followed, including that he issued a controversial ruling in favor of Sallie Mae, his former employer, even though the ruling violated conflict-of-interest regulations.

He resigned from the Education Department in September 2008 after spending 17 months on paid leave.

Mr. Fontana was charged last Tuesday with making a false writing and with conflict of interest, both misdemeanors. The prosecutors say he lied about his stock holdings on multiple financial-disclosure forms and urged other members of the Education Department to make decisions that would benefit Student Loan XPress.

In a plea agreement filed last Thursday, Mr. Fontana agreed to plead guilty and pay a fine of $85,000 to $115,000 but would not serve prison time. A judge has to approve the agreement before it can take effect.

A lawyer for Mr. Fontana did not immediately return a call seeking comment.

Comments

1. 11132507 - November 02, 2009 at 03:46 pm

"...even though the ruling violated conflict-of-interest regulations."

I guess you can hardly blame the guy...who ever would have known that conflict-of-interest regulations even existed or that you could get in trouble for lying about anything during the Bush administration?

2. davi2665 - November 02, 2009 at 04:19 pm

Right. And who would ever think that you actually need to pay taxes during the Obama administration, especially if you are destined for a high level position, say for example Treasury.

3. lontraman - November 02, 2009 at 04:22 pm

During the Bush Administration there was no conflict of interest...it was always "self interest" (Google "Haliburton" or "Valerie Plame" for details). It has only been since the socialistic and evil "Obama Administration" came to power that these types of activities are seen as "bad".

4. atana09 - November 02, 2009 at 05:28 pm

Not necessarily a condition specifically linked to one administration over another. Sallie Mae, and like brethren in the educational debt industry have been co-opting the Dept of Education and US education policy for more than a generation.

We have to remember that the charming red herring which began it all, the mythos of "doctors and lawyers defaulting on student loans" was largely implanted long ago by SMC into the debate of privitization with the intent of allowing them to exceed regulations.From there it was only a matter of time before further implants (both people and misinformation) ensured US policy was directed to privatization. And we know how well that turned out, for Sallie Mae, Nelnet and company if for no one else. And that was clear back in the last century.
If Secretary Duncan wants to move on the reform road, rather than complaining about teacher training he should emphasize a major housecleaning at the USDOE. Until the implants, shills, spys and etc put there by the educational debt industry are booted out-there won't be any reform and gods know they'll be the continued influence peddling and shell games with other peoples money. Duncan really needs to realize the USDOE is swimming with corporate sharks and he's not in the bliss of a simple school district anymore. The sharks, spies and shills he has in the USDOE play, or steal for billions. And so pontificating about teacher training, is a distraction at best and at worst a continuance of not getting the powers behind the screen out of the USDOE.

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