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A Pennsylvania man has been charged with conspiring to fraudulently charge the Dept. of Veterans Affairs for online college courses that appeared to be offered through Caldwell University but in fact were offered by a correspondence school. (Tim Hawk | Gloucester County Times)

NEWARK -- A Pennsylvania man who allegedly schemed with former officials at Caldwell University was charged Thursday with plotting to defraud a program that funded the education of veterans who served in the armed forces following the Sept. 11, 2001 terrorist attacks.

According to a criminal complaint, the fraud involved tricking veterans into thinking they had enrolled in accredited university classes when they actually were taking courses developed and taught by an online correspondence school.

David Alvey, of Harrisburg, Pa., appeared before U.S. Magistrate Judge Stephanie A. Gallagher in the Baltimore Division of the Maryland District Court Thursday afternoon, according to the office of U.S. Attorney Paul J. Fishman.

Alvey, 49, is charged with one count of conspiracy to commit wire fraud, Fishman's office said.

Alvey is the first individual to be charged in the alleged scheme, Fishman's office said, adding that the investigation is ongoing.

Caldwell is the unnamed university referenced in the criminal complaint, said its attorney, Henry E. Klingeman.

The university, he said, has been cooperating in the investigation.

"Caldwell University was made aware today of the charges against ED4MIL's former President and owner," he said in a statement. "More than five years ago, Caldwell began a contractual relationship with ED4MIL, a relationship Caldwell ended in 2013. Neither Caldwell University nor its current administration or staff is accused of wrongdoing."

He said the university would not issue any further statement "out of respect for the ongoing criminal process."

According to the criminal complaint, this is how the alleged scheme worked:

Alvey is the founder and president of ED4MIL, a Lewisberry, Pa. for-profit firm that marketed and sold educational materials to members of the military.

Alvey, the complaint said, pitched the idea to university employees, who are identified as unnamed co-conspirators in the complaint, to partner with the university as a money-making plan for the school beginning in 2007.

In 2009, Alvey proposed to the co-conspirators an online non-credit "GI Bill Program" that would be offered through the university, but taught and administered by the correspondence school and other private entities contracted by Alvey, the complaint said.

The cost of the courses would be paid through the Post 9/11 GI Bill.

An unnamed co-conspirator, identified as an associate dean no longer with the university, worked with Alvey to sell the plan to the school. That person, the complaint says, left the university to work for ED4MIL.

A second university employee, also identified as a co-conspirator, signed off on the program, knowing that Caldwell would not be providing the education, the complaint says.

During the application to participate in the tuition benefit program, administered by the U.S. Department of Veterans Affairs, Alvey and co-conspirators did not disclose the involvement of ED4MIL or the correspondence school to the VA.

On Feb. 4, 2011, the university submitted an application falsely stating that the classes were primarily taught by university faculty who teach on campus, and that courses "are the same as those courses offered on campus with the same learning outcomes," the complaint says.

The application was approved Feb. 24, 2011, it said.

Salesmen then went to military bases throughout the U.S. and pitched the classes, wearing t-shirts and handing out pens emblazoned with the university's name.

Those who enrolled had their information sent to a third alleged university co-conspirator who nominally enrolled the veterans in the university, but simultaneously enrolled them in the correspondence school, the complaint said.

The complaint says the university charged the VA prices that were 10 to 30 times higher than equivalent correspondence courses. It says, for example, that most of the correspondence school's classes cost between $600-$1,000, but the university billed for courses costing $5,000 to $26,000 per course.

By December, 2011, veterans were complaining, with one individual complaining that the VA was being charged $8,000 for a course that normally cost $749, the complaint said.

From 2011 through August 2013, the VA paid out about $35 million in tuition and other benefits for thousands of veterans, it said.

It did not specify how or if the university made any money in the alleged scheme.

"The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nation's deserving veterans and their families," said Jeffrey G. Hughes, special agent in charge of the VA's Office of Inspector General's Northeast Field Office.

The wire fraud conspiracy count carries a maximum penalty of 20 years in prison and a fine, Fishman's office said.

Fishman credited special agents of the VA's Northeast field office, the FBI and the U.S. Department of Education, Office of Inspector General, with the investigation leading to the arrest.

Tim Darragh may be reached at tdarragh@njadvancemedia.com. Follow him on Twitter @timdarragh. Find NJ.com on Facebook.