Education Fraud

September 6, 2018

Two copycat military website operators—Sunkey Publishing, Inc. and Fanmail.com, 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

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)

December 4, 2017

Former U.S. Congresswoman Corrine Brown was sentenced to five years in prison and to forfeit roughly $650,000 for her role in a conspiracy and fraud scheme involving a sham scholarship charity One Door For Education.  Brown’s long-time Chief of Staff Elias “Ronnie” Simmons was sentenced to serve 48 months in prison and Carla Wiley, the president of the fraudulent charity, was sentenced to serve 21 months in prison.  DOJ

August 18, 2017

California announced a tentative settlement that provides over $51 million in debt relief for Californians who attended Corinthian Colleges. Corinthian intentionally targeted low-income, vulnerable individuals through deceptive and false advertising that misrepresented job placement rates and school programs. These unlawful activities were enabled by Aequitas Capital Management Inc., a private equity firm currently under U.S. Securities and Exchange Commission-imposed receivership. Federal student loans made up almost 90 percent of Corinthian’s revenue. To maintain this revenue, Corinthian needed its mostly low-income students to receive these loans. Federal rules require for-profit colleges receive at least 10 percent of their revenue from sources other than federal student aid. To help fill this gap, Aequitas and Corinthian created a financial arrangement whereby Aequitas provided private loans to Corinthian students, and Corinthian guaranteed Aequitas a profit and agreed to buy back all non-performing loans. CA, FL

July 5, 2017

The FTC mailed 173,000 refund checks totaling more than $49 million to students in compensation for DeVry University’s allegedly misleading ads, which the Commission alleged deceived students about their likelihood of finding jobs in their field of study and the income level they could achieve upon graduation. According to the FTC’s complaint, DeVry deceptively claimed that 90 percent of its graduates actively seeking employment landed jobs in their field within six months of graduation and that graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities. As part of the FTC’s $100 million settlement, the school agreed to pay $49.4 million to the FTC for partial refunds to some students and $50.6 million in debt relief. The debt forgiven included the full balance owed—$30.35 million—on all private unpaid student loans that DeVry issued to undergraduates between September 2008 and September 2015, and $20.25 million in student debts for items such as tuition, books and lab fees. FTC

May 1, 2017

New York announced the sentencing of Keisha Relf Davis, a New York State Department of Education vocational counselor, for taking part in a scheme that stole nearly $2.4 million from New York State. In September 2014, a Bronx County grand jury indicted Relf Davis along with co-defendants, Juan Cabrera and Juani Ortiz, who were already sentenced on Grand Larceny charges. Relf Davis was sentenced to two to six years in state prison by the Honorable Justice Steven Barrett. As part of the scheme, Relf Davis, in exchange for cash bribes, approved students for the Office of Adult Career and Continuing Education Services’ Vocational Rehabilitation Program (“ACCES-VR”), although these students never applied to the program. The ACCES-VR program was created to help eligible New Yorkers with disabilities and functional limitations gain self-dependence through education, training, and employment. Relf Davis knew that the students she approved did not have disabilities or functional limitations to qualify for this program. NY