For-Profit College Group Sued as U.S. Lays Out Wide Fraud
The U.S. Justice Department filed a claim Monday against Education Management Corporation (EDMC) alleging the company's recruiting compensation structure violates the federal Higher Education Act. Goldberg Kohn is co-lead counsel to the whistleblowers who originated the case against EDMC.
The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.
While the civil lawsuit is one of many raising similar charges against the expanding for-profit college industry, the case is the first in which the government intervened to back whistle-blowers’ claims that a company consistently violated federal law by paying recruiters based on how many students it enrolled. The suit said that each year, Education Management falsely certified that it was complying with the law, making it eligible to receive student financial aid.