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October 18, 2023

For-profit Sollers College, its parent company, Sollers Inc., and its founder and president Siba Padhi have been ordered to cancel $3.4 million in student debt and pay $1.2 million in civil penalties for misrepresenting its job placements rates and relationships with prominent companies in order to lure students to the school.  Since 2018, Sollers claimed that 90% of its graduates were placed in jobs within 3 months of graduation, when in reality the number was as low as 52%.  Sollers also encouraged students into paying tuition with illegal income-sharing agreements, wherein students would pay the school a fixed percentage of their future income for about two years.  Nearly 400 students nationwide were affected by this misconduct, with more than 60 of them being residents of New Jersey.  NJ AG; FTC

October 2, 2023

Stanford University has agreed to pay nearly $2 million to resolve allegations of violating the False Claims Act in connection with 16 research grant proposals submitted to the Departments of the Army, Navy and Air Force, NASA, and the National Science Foundation (NSF).  According to the government, Stanford failed to disclose foreign funding that had been received or was expected to be received between 2015 and 2020.  DOJ

September 21, 2023

Yale University and Dr. John Krystal—who was employed at Yale in multiple roles, including as a psychiatry professor and chair with the School of Medicine, and as a clinical psychiatrist with research responsibilities at the VA Medical Center—has agreed to pay $1.5 million to resolve their liability under the False Claims Act.  According to the government, Dr. Krystal and four co-inventors failed to share royalties with the VA for several patents they obtained for discovering that depression and suicidal ideation could be treated with intranasal ketamine.  Yale and Dr. Krystal began receiving the royalties in 2015, and the royalties now total more than $3 million.  DOJ

June 26, 2023

In the largest ever Post-9/11 GI Bill fraud case, co-conspirators Michael Bostock, Eric Bostock, and Philip Abod, through their VA-approved technical training school, California Technical Academy, defrauded the federal government out of nearly $105 million by making false and fraudulent representation to the VA. More specifically, from January 2012 through June 2022, the co-conspirators submitted falsified course completion records for enrolled veterans, including approved courses of study, class attendance, and grades. To conceal their fraud, they falsified veterans’ contact information so that when regulators called veteran-students to verify information, one of the three co-conspirators answered the line instead. DOJ

February 28, 2023

Seven defendants who previously pleaded guilty to defrauding a federal program that provides technology to underprivileged schools has been sentenced to up to 4 years in prison each and ordered to pay up to $1 million each in restitution.  Four of the defendants—Peretz Klein, Susan Klein, Ben Klein, and Sholem Steinberg—misrepresented themselves and their companies as vendors to schools participating in the federal E-Rate program, receiving over $14 million in federal funds even though they failed to provide much of the equipment ordered.  Two other defendants—Simon Goldbrener and Moshe Schwartz—misrepresented themselves as consultants who helped schools participate in the E-Rate program, when in fact, they took hundreds of thousands of dollars in bribes from the above vendors to circumvent the bidding process.  A final defendant, Aron Melber, was a school official who falsely certified to having obtained E-Rate-funded equipment and services through a fair and open bidding process.  USAO SDNY

February 17, 2023

Two more defendants in a massive fraud scheme against the IRS and Paycheck Protection Program (PPP) have been sentenced to roughly 3 years in prison each.  Using his California-based tax preparation business, Mana Tax Services, Thanh Rudin and co-conspirator Seir Havana submitted false income tax returns for at least nine professional athletes, causing $19 million in losses to the IRS.  Rudin and Havana then submitted false applications for PPP loans on behalf of small businesses, shell companies, and other business entities, causing millions more in losses to the PPP.  In October 2022, Rudin’s brother, Quin Rudin, was sentenced to 10 years for his role in the scheme.  USAO EDVA

February 16, 2023

Texas-based ELPSS Career Institute LLC and its director have been ordered to pay $9 million for violating the Post-9/11 GI Bill and False Claims Act.  Under the Post-9/11 GI Bill, the school was required to operate for at least two years before enrolling students receiving benefits.  ELPSS, however, did so less than a year after applying for approval, falsely certified to its compliance with all requirements, and as a result, received more than $2.3 million in reimbursements it was not entitled to.  USAO WDTX

February 7, 2023

Samsung C&T America, Inc., a U.S. subsidiary of the Korean conglomerate Samsung C&T Corporation, has agreed to pay $1 million after admitting that it deliberately misclassified and underpaid customs duties on imported footwear by inaccurately stating their materials and construction.  The violations of the False Claims Act occurred between 2016 and 2018, and involved footwear imported from China and Vietnam.  USAO SDNY

January 31, 2023

New York-based High Life LLC, which designs and imports apparel, has agreed to pay $1.3 million after admitting that it underreported the value of 67 shipments into the United States to avoid paying customs duties.  After multiple shipments were detained for possibly fraudulent declared values, High Life switched from purchasing apparel on Landed Duty Paid (LDP) to Free on Board (FOB), which allowed it to use the price its vendors paid to manufacturers as the value of the shipment, rather than what High Life paid the vendors.  However, because there were other restrictions on declaring value, High Life developed a formula to calculate what it wanted the declared value to be, then instructed vendors to use it.  USAO SDNY

January 30, 2023

International Vitamins Corporation (IVC), which imports and sells vitamins and supplements from China, has agreed to pay $22.8 million to settle claims of defrauding the United States.  The U.S.-based company allegedly avoided U.S. customs duties by misclassifying over 30 of its products, then failed to pay back duties owed after realizing it had underpaid millions of dollars.  The alleged fraud occurred between 2015 and 2019, and only came to scrutiny through a whistleblower’s lawsuit.  USAO SDNY
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