June 26, 2015

DOJ Catch Of The Week — Education Affiliates

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to Education Affiliates.  On Wednesday, the for-profit education company agreed to pay $13 million to settle charges it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid.  The Maryland-based company operates 50 campuses in the US under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing.  They provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas.  See DOJ Press Release.

According to the government, employees at Education Affiliates’ All State Career campus in Baltimore altered admissions test results to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications.  The government also charged the company with referring prospective students to “diploma mills” to obtain invalid online high school diplomas.  And the government further claimed the company at several of its schools violated the ban on incentive compensation for enrollment personnel, misrepresented graduation and job placement rates, altered attendance records and enrolled unqualified students.

In announcing the press release, the government stressed the importance of acting with integrity when it comes to schools participating in the federal student aid programs.  “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  Under Secretary Ted Mitchell of the US Department of Education could not agree more.  He highlighted how the conduct at issue here “victimized students and bilked taxpayers” and made clear his agency will not tolerate “such abusive behavior.”  US Department of Education Inspector General joined in, exclaiming “[u]sing fake high school diplomas is a particularly insidious abuse of the federal student aid system,” providing students with “only a worthless piece of paper.”

The allegations first arose in five whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  As part of this resolution, the five whistleblowers will receive whistleblower award payments totaling approximately $1.8 million.

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One Response to “DOJ Catch Of The Week — Education Affiliates

  1. 125 Community Colleges in the country also accepted the same high school diplomas from “diploma mills”, but are not facing the same penalties. The government needs to focus their efforts on the horrible community colleges that get to slide by without the same oversights.