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U.S. to Join Goldberg Kohn Suit Against For-Profit College Chain

May 2, 2011
New York Times

The Justice Department plans to intervene in a whistle-blower lawsuit charging that one of the nation’s largest for-profit college companies, the Education Management Corporation, defrauded the government by illegally paying recruiters based on the number of students they enrolled, according to a Securities and Exchange Commission filing on Monday.

The filing by Education Management, known as EDMC, said “several states” also planned to join in the False Claims Act case, in federal court in Pittsburgh, alleging violations of their state laws.

This is the first time prosecutors have joined such a case, one of dozens in recent years that accuse the for-profit college industry of illegal practices devised to increase federal student aid revenue. The company, which enrolls nearly 150,000 students, operates several career-college chains, including the Art Institute, Argosy University, Brown Mackie College and South University. To read the complete article click here.

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