For-profit education company Education Affiliates (EA) paid $13 million to the federal government in June to settle multiple False Claims Act (FCA) suits involving alleged fake test scores, bogus diplomas, and falsified financial aid applications.
Maryland-based EA operates post-secondary education training programs in healthcare and other industries across 50 campuses nationwide using various trade names, including All State Career, Fortis Institute, and Technical Career Institute, Inc.
Several U.S. Attorneys’ Offices, the Civil Division’s Commercial Litigation Branch, and the Department of Education (DOE) collaborated to bring five separate suits against the company in Maryland, Texas, Alabama, and Ohio. The government asserted that EA violated the False Claims Act (FCA) by submitting false claims to DoE for federal student aid for students enrolled in EA programs.
“Students who apply for federal financial aid to attend trade or professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland in a press release. Yet, according to the government’s allegations, EA altered admissions test results to admit unqualified students, created false high school diplomas or sent students to “diploma mills” to obtain invalid diplomas, and falsified students’ applications for federal student aid.
Of the $13 million EA paid to settle the allegations, $1.9 will repay DOE for federal aid awarded to students with alleged bogus high school credentials.
The settlement also resolved alleged violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records, and enrollment of unqualified students. These allegations also led to the criminal conviction of two EA admission representatives and one test proctor.
The five suits resolved through this settlement agreement were brought by whistleblowers, who will collectively receive $1.8 million from the settlement funds.
