Posts Tagged ‘Jason Sobek’

EDMC Whistleblower Case Moves Forward

The whistleblower case filed against Education Management Corporation by James Hoyer Law Firm client Jason Sobek has cleared a major hurdle. U.S. District Court Judge Terrence McVerry in Pittsburgh ruled to deny EDMC’s Motion to Dismiss Sobek’s suit.  The case will proceed on three major counts involving misrepresentations of job placement statistics and accreditation and allegations that EDMC failed to adequately record the Satisfactory Academic Progress of students, whereby allowing its schools to collect federal financial aid to which they were not entitled.

Sobek filed the suit in 2010 against EDMC, the country’s second largest for-profit college provider, after witnessing questionable practices while working as an Admissions Representative at the company.

Oral arguments were presented before Judge McVerry in Pittsburgh on May 13, 2013 by James Hoyer Senior Partner Christopher Casper. In response to today’s ruling, Casper said, “We are encouraged by the Court’s ruling.  It sends a message that companies cannot rake in hundreds of millions of dollars in taxpayer money while blatantly violating federal law.”

In his ruling denying EDMC’s Motion to Dismiss,  the judge wrote “EDMC presents several overarching lines of reasoning in support of dismissal.”  One of EDMC’s arguments claimed that even if the company committed the alleged violations, it would not be grounds for the government to refuse paying its schools federal financial aid.  The judge indicated “such a defense is fact-intensive and would not justify dismissal at the pleading stage.”  As a result, Judge McVerry determined “a final determination is premature at this time” and the case should proceed.

The case will now move on to the discovery phase.  “We look forward to taking depositions and the opportunity to put EDMC under oath,”said Casper.

Three additional counts in the suit were voluntarily dismissed.  One of those regarding “incentive compensation” continues on in a separate whistleblower case filed against EDMC.


For-profit College Whistleblower Interviewed on ABC World News

Whistleblower Jason Sobek

The whistleblower case against for-profit college giant Education Management Corporation (EDMC) was profiled in an investigative report on ABC World News.  James Hoyer Client Jason Sobek was interviewed and explained why he came forward to expose practices he believes are hurting, not only students, but also taxpayers.

Reporter Mark Greenblatt shared internal documents that show EDMC falsely inflated job placement statistics.

“They manipulated the job placement rates by counting students working in a job that they did not need the degree for,” Sobek told ABC News. “In my opinion, it’s a wretched fraud.”

EDMC is the 2nd largest for-profit college operator in the country.  It owns The Art Institutes, Brown Mackie, South University and Argosy University.  Sobek is a former Assistant Director of Admissions who recruited students to sign up for South University Online.

The story also profiles Brown Mackie student Sarah Fisher who graduated with an Associate’s Degree in Business Management.  Fisher works as a Customer Service Representative at Walmart, a job she found on her own while still attending school.  Since graduating, she’s been unable to find a job in her field of study, but internal EDMC documents show the school counted her as a successful job placement.

In addition, the documents Sobek shared show a Fashion Marketing graduate who works as a shoe salesman and an Accounting graduate who works as a McDonald’s cashier were also counted as successful job placements. Sobek believes counting these graduates as successful job placements is misleading.  He says the company uses them to inflate job placement statistics presented to potential students to get them to sign up and get their financial aid dollars.

ABC News asked U.S. Senator Dick Durbin, the Assistant Majority Leader of the Senate, to review the internal EDMC job placement records.  After his review, Senator Durbin issued a powerful rebuke.

“It’s just plain fraud and your whistle-blower has brought it to light,” Durbin told ABC News. “These students get sucked in by these ads, sign up for debt, sign up for courses that lead to nowhere,” Durbin says.

Click here to watch the ABC World News story and to read the online report.  You can also post a comment on the ABC News website.

Click here to watch another investigative report from WTAE TV in Pittsburgh, the hometown for EDMC’s headquarters.