For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student Aid
We’re going to take a little break from discussing Medicare fraud cases this week. The False Claims Act can be violated on many fronts and a False Claims Act whistleblower can step in whenever it is. Today we’re going to look at a case involving fraudulent claims made to the Department of Education.
In June, 2015 Education Affiliates (EA)—a for-profit education company based in White Marsh, Maryland—agreed to pay $13 million to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs. EA operates 50 campuses in the United States under various trade names which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas. This settlement resolved allegations and administrative claims involving schools in all five states.
The government’s false claims allegations against EA included the claim that employees at the All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications. The government also alleged that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. Further resolved were allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students.
“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland. “This settlement resolves the government’s allegations that Education Affiliates defrauded the government by changing students’ test scores and enrolling students with invalid diploma mill high school ‘diplomas’ ordered online.”
This qui tam law suit was filed under the whistleblower provision of the False Claims Act. The five whistleblowers in this case will receive whistle blower rewards totaling approximately $1.8 million
