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DOJ, States Join Whistleblower Lawsuit Against Education Management Corporation

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The Department of Justice and the states of California, Florida, Illinois, and Indiana have joined a lawsuit filed against Education Management Corp., (EDMC) by whistleblowers and former employees, Lynntoya Washington and Michael Mahoney, alleging the for-profit college operator illegally claimed it was eligible for federal student loan program like the Pell Grant, and government guaranteed loans, and improperly compensated student recruiters, Main Justice.com has reported.

According to attorneys involved with the case, EDMC has illegally received more than $11 billion in federal funds through the programs. The compensation method used by the company, in which they pay staff members based on their number of recruits is also a violation of federal law. The Higher Education Act prohibits schools from using bonuses and incentives to reward college recruiters for student registrations as a way to prevent colleges from accepting unqualified students in order to collect federal funds.

“This action against EDMC seeks to recover a portion of the $11 billion in federal student aid which EDMC allegedly obtained through false statements and which enriched the company, its shareholders and executives at the expense of innocent individuals seeking a quality education,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania, in a statement reported on the website of Main Justice.

EDMC enrolls thousands of students for schools like the Art Institutes, and Argosy University.

 

 

breakinglawsuitnews.com disclaimer: This article: DOJ, States Join Whistleblower Lawsuit Against Education Management Corporation was posted on Thursday, August 11th, 2011 at 7:28 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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