It doesn’t look like the Texas-based chain of schools under ATI Enterprises Incorporated (ATI) have much of a lesson to offer its students regarding honesty and integrity. The education system has agreed to pay the United States government $3.7 million to resolve allegations that it intentionally mislead the government into believing that it met requirements for student aid.
According to the Department of Justice’s release on the matter, the Texas group knowingly made false claims and misrepresentations to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges about job placement statistics. These statistics are used by those institutions to approve licensing and accrediting, the effect of which is for the institution to be eligible for federal funding.
“For-profit education corporations have come under heavy fire for bilking state-based funding for every available dollar,” commented Christopher Paulos, an attorney with the Levin, Papantonio law firm. “Many educational institutions are often genuinely in need of more funding and then you have a some groups, like ATI, that come along and wrongfully consume what are normally very limited amounts of tax-payer money.” Mr. Paulos practices in the areas of qui tam or whistleblower and false claims act litigation, similar to the case against ATI. “Sadly, most of this money is used to pay skyrocketing tuition costs that are easily traced directly into the administrators’ pockets. Very few funds are used to increase the quality of education for students at such schools.”
Beyond employees misrepresenting their employment statistics to maintain eligibility and accreditation, the government alleged that ATI made a practice of encouraging students to fraudulently enroll. The practice not only falsely took money from the government and thereby taxpayers, but forced students to incur debt in the form of student loans that those students otherwise would not have incurred.
Unfortunately, education fraud is not that rare. Mr. Paulos continued, “Uncovering the submission of false claims by corporations and institutions is a complicated and delicate process. Often it is only uncovered by those with intimate, insider knowledge of an entity’s fraudulent practices coming forward and reporting it through the proper channels. If a person suspects that the company they work for may be fraudulently or wrongfully billing the government, they should contact an experienced attorney immediately.”
The false claims act is designed to protect and incentivise individuals with knowledge of dishonest practices costing the government to come forward and report it. To date the False Claims Act is responsible for recovering billions of fraudulently got gains on behalf of the government.