Lieff Cabraser Civil Justice Blog
Massive Settlement Expected in Education Fraud Case

Massive Settlement Likely In Education Fraud Case

As reported by the Huffington Post, federal and state prosecutors are preparing to announce a substantial settlement with Education Management Corporation, one of the nation’s largest for-profit college chains, that will resolve allegations the company defrauded taxpayers out of $11 billion.

The settlement, which could come as soon as Monday, is expected to require Education Management to pay roughly $100 million. That might sound large, but it is in fact less than one percent of the federal student aid monies the government argues the company fraudulently claimed from 2003 to 2011. Under the False Claims Act and its whistleblower provisions, experts say the federal government could recover three times the amount, or $33 billion, plus additional penalties.

Unfortunately, at this point the former Education Management students the government alleges were either ineligible to receive federal student loans or were duped by false promises into enrolling are likely to remain liable for debts they owe to the Department of Education. The underlying lawsuit claims Education Management illegally paid bonuses to its employees solely for getting students to enroll, then lied to the government by certifying compliance with federal rules banning such payments. You can read the full article on the Huffington Post website.

Whistleblower Law False Claims Act Attorneys at Lieff Cabraser

Lieff Cabraser represents whistleblowers in a wide range of Whistleblower/False Claims Act cases, including education lending fraud like that alleged in the Education Management case, medicare and healthcare fraud, defense contractor fraud, securities and financial fraud, and many other fraud-on-the-government false claims. We have the resources, experience, and skill to appropriately investigate even the largest and most complex matters and take them all the way through trial. Learn more about Lieff Cabraser’s whistleblower law and False Claims Act practice.