The Department of Justice recently announced that Education Affiliates, a for-profit education company, agreed to pay $13 million to the United States to resolve allegations that it violated the False Claims Act. The company was accused of submitting false claims to the Department of Education for federal student aid for students enrolled in its programs.
The James Hoyer whistleblower case, United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.), was one of several qui tam cases alleging predatory conduct that victimized students and bilked taxpayers out of millions of dollars. Partner Jesse Hoyer was the lead attorney on the firm’s case.
“This is another example of a for profit college taking advantage of students and taxpayers,” Hoyer said. “It’s an issue we all need to care about and encourage our government to continue to crack down on these schools to stop predatory behavior, because we are all paying the tab.”
As outlined in the DOJ news release: The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.
“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education’s Office of Inspector General (OIG). “Students received only a worthless piece of paper.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, described the settlement as an “excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students.”
The settlement sends a message that schools have a responsibility to uphold standards when they accept taxpayer dollars to pay for a student’s education. “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds,” said Mizer.