Princeton Review Settles False Claims Act Allegations for $10 Million

Education Holdings Inc. has reached a $10 million settlement with the U.S. government to resolve charges that the education company violated the federal False Claim Act, according to the Corporate Crime Reporter. The alleged misconduct was engaged in by The Princeton Review, which was owned by Education Holdings Inc. until May 2012 when the company was sold to Charlesbank Capital Partners.

The Princeton Review was a federally-funded program that offered tutoring services to children who attend New York City schools that are under-performing. To boost its own profits, the company violated the False Claims Act by paying its directors to pressure the site managers to report higher attendance numbers. The site managers accomplished this task by concocting student attendance records. The company then billed the government for tutoring services that had not in fact been provided. As part of the settlement, Education Holdings admitted that Princeton Review had falsified student attendance records and submitted false claims to the government for reimbursement for nonexistent tutoring services.

Government Contractor Misconduct Includes False Claims for Sham Education Services

When government contractors violate the federal False Claims Act, U.S. taxpayers foot the bill. At a time when lawmakers are forced to cut important federally funded programs, the government cannot afford to subsidize student programs that bill taxpayers for services never provided. Those hurt the worst, of course, are the students who never get a chance to benefit from programs robbed by unscrupulous education contractors lining their own pockets.

But government contractor employees are hurt too. Recruiters and administrators are often pressured to lie to the government about the number of students they teach or enroll. Other times, they may be encouraged to tamper with or falsify qualification results for student enrolement. Regardless of the misconduct, educational program, or school, employees are the ones most likely to know about the improper activity and collaborate with the government to stop it. Whistleblower insiders help everyone by keeping federally funded educational contractors honest.

Employee Insiders Use False Claims Act to Fight Educational Program Misconduct

Employee insiders are often the best positioned to discover educational fraud and notify the government. School recruiters, administrators, educators or other employees may receive financial incentives to defraud the government. Accounting personnel may be instructed to engage in unethical billing practices.

To encourage whistleblowers to come forward, the qui tam provisions of the federal False Claims Act permit tipsters to file suit on behalf of the government and retain a share of any recovery.

Informants need to know their rights. The attorneys at Waters & Kraus are ready to give government collaborators the answers they need. Contact us or call our whistleblower lawyers at 800.226.9880 to learn more about our educational fraud practice and how we can help recruiters, administrators and educators.

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