Counselor ‘created’ fake students and stole $1.3M in tuition fraud scheme, feds say

A state worker “created” a number of fake college students, claiming they were her clients suffering from disabilities and illnesses in a tuition fraud scheme — ultimately stealing $1.3 million in Georgia, federal prosecutors say.

Karen C. Lyke, 37, used the stolen taxpayer money — meant for real people qualifying for state tuition help — to splurge on a new home, cars, jewelry and high-end guitars, according to the U.S. Attorney’s Office for the Northern District of Georgia.

The former Georgia Vocational Rehabilitation Agency counselor was charged with conspiring to commit federal program theft and has indicated she plans to plead guilty after causing roughly 230 undeserved checks to get mailed out for 13 fake students, according to an Aug. 25 news release from the attorney’s office. These checks ended up in her and a family member’s hands.

McClatchy News contacted Lyke’s attorney for comment on Aug. 26 and was awaiting a response.

“Karen Lyke targeted money meant for those with disabilities trying to improve their lives,” FBI Atlanta Special Agent in Charge Keri Farley said in a statement.

The federally funded State Vocational Rehabilitation Agency provides grant money for states nationwide to support those with “a physical or mental impairment that results in a substantial impediment to employment,” the release says.

Lyke, of Toledo, Ohio, is accused of taking advantage of Georgia’s program, which helps those with disabilities find and keep jobs and offers tuition assistance, according to prosecutors. The program connects people with counselors, such as Lyke, who approve requests for tuition help after reviewing their records.

Between May 2016 and November 2020, the woman and a relative, who was not named in the release, concocted a scheme to claim educational expenses for 13 non-existent college students by using the names of their friends and family, the release says.

Lyke, while a counselor at GVRA’s Norcross office, doctored medical records for the fake students, stating they “suffered from disabilities or illnesses like AIDS, cancer, psychosocial impairments, or muscular dystrophy,” prosecutors say.

To support the existence of these “students,” Lyke gave the GVRA doctored driver’s licenses to show the names of her friends and family, according to the release.

For one fake student, prosecutors say Lyke’s relative found a random mugshot online and used it as the photo for an altered driver’s license.

What’s more is that the 13 purported students appeared to attend state schools such the Georgia Institute of Technology, Georgia State University, or the University of Georgia after Lyke altered college transcripts and other documents copied from the program’s real clients to use in the scheme, according to the release.

Lyke, through her position working for the GVRA, would upload the forged documents into the agency’s database, according to prosecutors. This resulted in more than 230 checks, totaling $1.3 million, to get sent out for the fake students’ education expenses.

After she stopped working for the GVRA in 2019, she still continued the tuition fraud scheme with her relative, the release says.

The $1.3 million in tuition funds is not all that the pair stole, prosecutors say. They’re also accused of stealing seven computers from the GVRA, worth an estimated $32,000.

The Georgia Office of Inspector General and the FBI ultimately caught on to Lyke’s scheme and began investigating, according to the release.

Norcross is roughly 20 miles northeast of Atlanta.

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