Archive

November 20, 2023

Student lender Prehired has been ordered to shut down permanently, pay more than $4.2 million in restitution, and void nearly $27 million in outstanding loans for allegedly trapping students with unlawful loans and employing abusive debt collection practices.  According to the CFPB and the attorneys general of 10 states, Prehired’s 12-week online training program made false promises about its ability to help students obtain six-figure paying jobs, while keeping them in the dark about key loan information.  CFPB; DE AG; NC AG

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

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 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

August 15, 2022

Flight instruction company Universal Helicopters Inc. will pay $7 million, and Dodge City Community College will pay $500,000, to resolve claims that the defendants made false statements to the VA in order to receive funding through the Post-9/11 GI Bill program for training programs they jointly ran.  Specifically, the defendants were alleged to have falsely certified that no more than 85 percent of the students in helicopter flight instructor programs were receiving VA benefits.  The government’s investigation was initiated by a whistleblower suit brought under the False Claims Act by a veteran and former student in the program, William Rowe.  Rowe will receive $1.125 million of the settlement.  DOJ

August 3, 2022

William Richard “Rick” Carter, Jr. will spend 66 months in prison and pay over $1.3 million in restitution for his scheme to defraud the Alabama State Department of Education, in a conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Carter and his co-conspirators fraudulently enrolled students in public virtual schools to receive payments from Alabama’s Education Trust Fund, and then took portions of the money for their own use through direct cash payments and payments to third-party contractors owned by the various co-conspirators—William L. (“Trey”) Holladay, III, Gregory (“Greg”) Earl Corkren, David Webb Tutt, and Thomas Michael Sisk.  USAO MDAL

August 2, 2022

Denver Public Schools paid over $2.1 million to resolve a False Claims Act investigation into its misuse of AmeriCorps funds. AmeriCorps funds are used to address critical community needs such as fighting poverty, mentoring youth, and increasing academic achievement. To that end, AmeriCorps provides education awards to their volunteers a/k/a “members” for performing a specified number of service hours in these communities. DPS recruited their existing employees for AmeriCorps programs and double-counted hours spent on their employment duties as being on service, which is disallowed as it deprives the students of the net benefit of the additional support they would have received from non-DPS-employed AmeriCorps members. USAO CO

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

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