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April 15, 2022

Caribbean Saint James School of Medicine a/k/a Human Resource Development Services, Inc., and its operator Kaushik Guha will pay $1.2 million in refunds to students who were lured by exaggerated promises of future success. For a period spanning at least 4 years, the defendants misrepresented their students’ medical license exam pass rate and misrepresented their residency match rate, stating that theirs was equal American schools’ match rate. Defendants violated the FTC’s Holder Rule, which requires specific notice to credit-holding consumers informing them of their right to assert claims, and also failed to provide a CPR disclosure in their credit agreements. FTC

April 11, 2022

Six California-based companies that conspired with a Chinese billionaire to defraud U.S. Customs and Border Protection and investors worldwide have been ordered to pay $1.83 billion in restitution.  A federal jury found that Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC, Scuderia Development LLC, 1001 Doubleday LLC, Von Karman – Main Street LLC, and 10681 Production Avenue LLC skirted the U.S.’s anti-dumping and countervailing duties (AD/CVD) on certain types of extruded aluminum imported from China by disguising them as functional pallets.  USAO CDCA

March 7, 2022

Ashford University, an online, for-profit school, and its parent company, Zovio, Inc., have been ordered to pay $22.37 million in penalties after a California court ruled in favor of the state attorney general’s office by finding that they presented false and misleading information to students to encourage them to enroll.  The lawsuit had alleged that Ashford’s promises about career outcomes, cost and financial aid, and ability to transfer credits caused many students to be saddled with debt and nothing to show for it.  CA AG

February 11, 2022

Defendants Seyed Taher Kameli and his companies, Chicagoland Foreign Investment Group, LLC and American Enterprise Pioneers, Inc., will pay jointly and severally $1.6 million after entering into a judgment for defrauding EB-5 immigrant investors. Kameli is an immigration attorney, some of whose clients were victims of the fraud. He promised at least 226 foreign investors that their $500,000 investments would finance construction of a senior living project and pave the way for at least 10 permanent full-time jobs, as well as qualifying each investor for a path to permanent U.S. residency. Instead, he commingled and misused some of the $88.7 million raised. Defendants are enjoined from further violations of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kameli also agreed administratively to a 5-year suspension from practicing before the SEC as an attorney. SEC

January 14, 2022

Conduent Education Services LLC, f/k/a Xerox Education Services LLC, d/b/a ACS Education Services LLC (CES)—a contractor that serviced student loans for lenders—has agreed to pay $7.9 million to resolve allegations of submitting or causing the submission of false claims to the Department of Education (DOE) between 2006 and 2016.  In violation of Federal Family Education Loan (FFEL) program rules and the False Claims Act, CES allegedly failed to accurately report required data on the impact of monthly student loan repayments, principal capitalization, and other changes to DOE.  Under a prior remediation plan, CES paid DOE $1.4 million to partially resolve its liability, which it received credit for in the current settlement.  DOJ

January 13, 2022

One of the nation’s largest student loan servicers, Navient, f/k/a Sallie Mae, has agreed to a $1.85 billion settlement with 39 states to resolve allegations of widespread deceptive and predatory lending practices in the early-to-mid 2000s.  $95 million of the settlement proceeds will be in the form of restitution payments of approximately $260 each to about 357,000 borrowers, while the remaining $1.7 billion will be in the form of cancelled debts for about 7,400 borrowers.  In addition to the monetary settlement, Navient has also agreed to substantial injunctive terms.  CA AG; FL AG; VA AG

November 16, 2021

Richard Ayvazyan was sentence to 17 years in prison, his wife Marietta Terabelian to six years, and his brother Artur Ayvazyan to five years, following their convictions at trial on charges related to their scheme to fraudulently obtain more than $20 million in Paycheck Protection Program and Economic Injury Disaster Loan COVID-19 relief funds.  The defendants used dozens of false identities to submit fraudulent applications for approximately 150 PPP and EIDL loans, supporting applications with false and fictitious documents including fake identity documents, tax documents and payroll records. DOJ; USAO CD Cal

October 21, 2021

Boulder, Colorado nonprofit The Center for Severe Weather Research paid $2.4 million to resolve allegations of fraud in federal grants received from the National Science Foundation, NASA, and NOAA.  CSWR was alleged to have improperly requested drawdowns from federal grants for expenses it had not incurred, and to have improperly retained interest accrued on federal funds received but not yet needed.  In addition, two CSWR principles, Ling Chan and Joshua Wurman, agreed to pay $203,776 to resolve allegations that they improperly obtained payments for ineligible expenses, including rental payment for CSWR offices in their personal residence.  USAO CO

September 22, 2021

Jonathan Dean Davis, the owner of the Retail Ready Career Center, a for-profit trade school, was sentenced to nearly 20 years in prison following his conviction on fraud charges.  Davis marketed his school’s HVAC training course to veterans by falsely securing certification of his program by Texas state agencies in order qualify the program to charge veterans’ tuition and fees to the Veteran’s Administration under the Veteran’s Educational Assistance Act.  In fact, Retail Ready used up veteran’s GI Bill benefits and failed to prepare them for careers while collecting more than $72 million in GI Bill benefits from the VA.  Davis was also ordered to pay $65.2 million in restitution and forfeit $72.5 millionUSAO ND TX

September 21, 2021

The University of North Carolina at Chapel Hill (UNC-CH), East Carolina University (ECU), and the North Carolina Commission on Volunteerism and Community Service (NCCV), have agreed to pay a combined $842,500 to resolve allegations of fraud in connection with the AmeriCorps program.  An investigation by the United States had found that UNC-CH, ECU, and NCCV failed to comply with multiple grant requirements and regulations, including falsely certifying the service hours worked by AmeriCorps members, falsely certifying employee salaries required to administer the program, and failing to maintain proper internal controls.  USAO EDNC
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