October 26, 2010
colleges and trade schools have been under fire lately for engaging in
fraudulent marketing efforts. Recent
investigations have uncovered deceptive recruiting, placement and billing
practices among schools that receive billions of dollars in Federal Pell Grants
and guaranteed student loans. In
exchange for government grants, these schools are required by law to adequately
educate students and fulfill their career placement promises. Many, however, have resorted to unscrupulous
practices that have resulted in large numbers of unemployed graduates
defaulting on student loans, ripping off taxpayers and inflating our nation’s
current unemployment statistics.
Kershaw, Cutter & Ratinoff has already successfully represented
scores of students against their so-called educators. Now, KCR is looking to take the fight a
step further by pursuing legal action against for-profit schools engaging in
fraud under recently improved Federal Whistleblower Statutes.
"whistleblower” is a person, usually an employee or former employee, who
publicly reports illegal activities of an organization that is cheating or
defrauding the government. Although
whistleblower laws were enacted in the mid-1980’s to combat fraud in defense
contracts, twenty years later the majority of whistleblower lawsuits were filed
due to healthcare fraud. Now, over
thirty years after the statutes were enacted, the new wave of fraud appears to
be occurring in the educational system.
In July of
this year whistleblower statutes were revisited as part of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, enacting new provisions for
reporting fraud against the government that reward private citizens with 10 to
30 percent of the amount recovered over $1 Million. Depending on the amount recovered by the
government, the percentage paid to the whistleblower can be tens or hundreds of
thousands of dollars.
people knew that they could help the government retrieve vast amounts of wasted
taxpayer dollars, and in the process earn a substantial paycheck of their own,
I think we’d see a tremendous rise in whistleblower lawsuits against these
fraudulent trade schools,” comments Stuart Talley, one of Kershaw, Cutter &
Ratinoff’s leading whistleblower attorneys.
important to note that the new whistleblower statutes have also improved the
protections available to people who blow the whistle on their employer. One such protection is the process of filing
the lawsuit "under seal.” This means
that the complaint is kept secret and will not be available to the public or
the whistleblower’s employer. Once the complaint
is filed, it is then served on the United States Attorney’s Office, who will
then investigate and determine whether or not they will step in, or allow the
whistleblower to pursue the case on his or her own. When they do intervene, their attorneys
pursue the case on behalf of the government and the whistleblower will receive
a percentage of what is recovered at the end of the case. If they choose not to intervene, the
whistleblower has the option of dismissing the case before it is ever unsealed.
When this occurs, the employer never
becomes aware that a case was ever filed.
lawsuits are generally very successful once the government intervenes, which is
why it’s important to choose a law firm that has experience
working with the U.S. Attorney’s Office in whistleblower lawsuits.
There are many types of fraudulent
activity occurring at for-profit trade schools throughout the country. Some of the most common deceptive and illegal
- Encouraging financial aid
counselors to submit financial aid applications for Pell Grants or
Federally guaranteed student loans that contain erroneous information;
- Encouraging enrollment
counselors to admit unqualified students by altering the results of their
entrance exams, giving the students the answers to the exams, or allowing
them to take the exams multiple times until a passing score is achieved;
- Giving improper financial
incentives to enrollment counselors to meet certain enrollment quotas;
- Encouraging teachers to pass
unqualified students in order to meet certain "retention quotas;”
- Encouraging placement
counselors to fraudulently represent that a student has been "placed” or
has "waived placement” following graduation in order to alter the school’s
employment rate statistics;
- Encouraging enrollment
counselors to lie to students about prospects for employment and salary
ranges following graduation.
If you have witnessed any of the above and other questionable
tactics, please contact us for a free and confidential case evaluation by calling 888-285-3333, or filling out the contact form found on this page and throughout our site. In a successful whistleblower lawsuit, the
first person to report fraud is the person who receives the reward.
information about for-profit college fraud, visit our Facebook
page titled, "Fight Trade School Scams,” and a corresponding personal injury resource blog that
offers advice on how to recognize deceptive marketing practices of for-profit