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Education Fraud

This archive displays posts tagged as relevant to fraud in government education programs. You may also be interested in the following pages:

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May 15, 2019

Robert C. Leonard, CEO of Force Multiplier Solutions, has been ordered to pay $125 million in restitution for his part in a bribery scheme which took down public officials and brought about the collapse of Dallas County Schools. Mr. Leonard pleaded guilty to conspiracy to commit honest services wire fraud and was sentenced to seven years in federal prison.  DOJ

February 11, 2019

North Greenville University (NGU) in South Carolina has agreed to pay $2.5 million to settle claims that it violated Title IV of the Higher Education Act, as well as the False Claims Act, by improperly compensating student recruiters with bonuses while receiving federal student aid. The alleged fraud was exposed by Maurice Shoe, co-owner of a recruiting company partially owned by NGU; Shoe will now receive $375,000 of the government’s recovery. DOJ

January 3, 2019

For-profit education company Career Education Corporation has entered in to settlement agreements with attorneys general in 48 states plus the District of Columbia to forgive $494 million in outstanding student loan debt issued by CEC and held by nearly 175,000 former students, and to provide additional protections for students enrolling in CEC programs.  CEC was alleged to have mislead prospective students regarding CEC enrollment, including the total cost of attendance, job placement rates, the transferrability of credits, and program offerings. See: CT; IL; KS; PA; WA

December 21, 2018

Vielka Maritza McFarlane, the founder and former CEO of Celerity Educational Group, a Los Angeles-based non-profit that owned and operated charter schools, has agreed to plead guilty for misappropriating public funds and falsely certifying that Celerity was complying with applicable rules and regulations.  McFarlane admitted that she directed approximately $2.5 million in public funds, including funds from the U.S. Department of Education, to improper uses.  USAO CD Cal

October 29, 2018

The FTC has settled with an online student loan refinancer, SoFi Lending Corps, for allegedly misrepresenting the amount that student loan borrowers could save by refinancing with their company, sometimes by double the actual amount. In calculating the savings, SoFi allegedly excluded certain borrowers and failed to disclose or disclose clearly the fact that it had made those exclusions, a violation of the FTC Act. It will face civil penalties if it violates the finalized settlement order. FTC

October 26, 2018

A former U.S. Department of Veterans Affairs official, James King, pleaded guilty to demanding and receiving bribes from three for-profit schools, Atius Technology Institute, Eelon Training Academy, and School A, in exchange for enrolling disabled military veterans in those schools.  All three school owners sent King and other VA officials false information about the education being provided to veterans.  King facilitated over $2 million in improper payments from the VA using the veterans’ federal benefits. DOJ

Catch of the Week — VA Official Pleads Guilty to Bribery, Fraud, and Obstruction in $2 Million Scheme

Posted  10/26/18
A former U.S. Department of Veterans Affairs official, James King of Baltimore, Maryland, pleaded guilty to demanding and receiving bribes from three for-profit schools in exchange for enrolling disabled military veterans in those schools. King facilitated over $2 million in improper payments from the VA using the veterans’ federal benefits. He pleaded guilty to one count of honest services and money/property wire...

September 6, 2018

Two copycat military website operators—Sunkey Publishing, Inc. and, LLC—have settled with the Federal Trade Commission (FTC) for violating the FTC Act and the FTC's Telemarketing Sales Rule (TSR). In addition to deceiving potential enlistees into providing personal information, the operators sold the information to schools as marketing leads, placed illegal telemarketing calls to people on the Do Not Call list, and gave potential enlistees the false impression that certain schools were endorsed by the military. As part of the settlement, they will turn over the websites and pay a suspended penalty of $12.1 million. FTC

Ninth Circuit Refuses to Kill Incentive Compensation Ban Whistleblower Suit

Posted  08/31/18
By Leah Judge
Education Fraud
Last week, the Ninth Circuit refused to kill a False Claims Act lawsuit alleging that San Francisco’s Academy of Art University violated the federal incentive compensation ban. The ban, which falls under Title IV of the Higher Education Act, prohibits schools that receive federal funds from paying incentives to employees for securing enrollments. The ban operates to protect students from pushy recruiters looking to...

January 31, 2018

Florida Technical College, Inc. agreed to pay $600,000 to settle claims it violated the False Claims Act through the college’s Cutler Bay Campus falsely certifying compliance with federal student aid programs’ eligibility requirements and submitting claims for 27 ineligible students. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Laurie Astacio, a former administrative assistant in the Cutler Bay admissions office. She will receive a whistleblower award from the proceeds of the government’s recovery. DOJ (SDFL)
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