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U.S. Alleges Stevens-Henager College, Inc. Violated False Claims Act

May 29, 2014 — The U. S. government has intervened in a qui tam lawsuit filed by two whistleblowers against Stevens-Henager College, Inc. and The Center for Excellence in Higher Education, which owns the college. Stevens-Henager runs a chain of for-profit colleges in Utah and Idaho. The tipsters — former Stevens-Henager employees — allege that the college was involved in education fraud and used an illegal system for compensating recruiters.

For-Profit Colleges in Utah and Idaho Allegedly Compensated Recruiters Illegally

Colleges are prohibited by federal statute from compensating admission recruiters according to the number of students they persuade to enroll in the college. The ban on incentive compensation is intended to prevent the admission of unqualified students, thereby reducing the default rates on student loans and the resulting waste of government funds devoted to student loans and grants. Stevens-Henager allegedly made false claims to the government that it was in compliance with this law when it was not.
The U. S. Justice Department relies on college insiders, like the conscientious informants in this case, to use the False Claims Act to file suit on the government’s behalf. Without the help of whistleblowers, unlawful recruitment practices will continue to harm students and waste taxpayer dollars. The Act allows inside employees to file a lawsuit seeking triple damages, as well as penalties. Under the statute’s qui tam provisions, tipsters are entitled to a share of any proceeds.

False Claims Act Lawsuits Prevent Waste and Abuse

Government investigators cannot catch every abuse of the system. But inside employees often have first-hand information about fraudulent practices right from the start. Waters & Kraus has qui tam attorneys in Dallas, Los Angeles and the Washington D. C. area who are devoted to protecting whistleblowers’ interests. Contact us by email or call us at 855. 784. 0268 to learn how we can collaborate to protect student loan programs from fraud and abuse.

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