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HomeNewsFalse Claims Act Whistleblowers’ Allegations Against For-Profit School Result in $3.7 Million Settlement

False Claims Act Whistleblowers’ Allegations Against For-Profit School Result in $3.7 Million Settlement

Date Published
Aug 26, 2013

The Department of Justice recently announced that ATI Enterprises Inc. agreed to pay the Government $3.7 million in a settlement to resolve claims that the company had defrauded federal student financial aid programs.

ATI Enterprises Inc. encompasses a group of higher education training schools in the southern and western United States.  These schools offer courses in health care, information technology, and other skilled trades.  According to allegations, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics.  This falsification allowed ATI Enterprises to maintain its state licensure and accreditation as well as its eligibility for federal financial aid under Title IV of the Higher Education Act of 1965.

In addition, the Government claimed that ATI employees misrepresented information in order to entice students to enroll and maintain their enrollment in ATI training schools.  By increasing the schools’ enrollment numbers in this manner, ATI Enterprises was able to receive a greater amount of federal funding.  This practice not only cost the U.S. taxpayers, but also burdened students with greater amounts of long-term debt.

This settlement resulted from complaints filed under the False Claims Act’s qui tam provisions.  Under this law, individuals with knowledge of fraud can file a lawsuit on behalf of the U.S. Government.  The person with information, known as the relator or whistleblower, can hire a qui tam attorney to represent him and bring his claims to the attention of lawyers in the Department of Justice.  Private citizens often have first-hand knowledge because their employers enlist them to facilitate schemes to defraud the Government.  The Government encourages these individuals to come forward with their information and take legal action.  Because whistleblowers play a vital role in exposing fraud committed against government programs, they are able to share in any recovery.  A relator’s share ranges from 15% to 25% of the settlement, which equals millions of dollars for the private individual!

The first complaint against ATI Enterprises was filed in July 2009 in the United States District Court for the Northern District of Texas.  In this case, seven former employees of ATI Enterprises put forth allegations of their employer’s misconduct.  The second complaint was filed two years later in the United States District Court for the Southern District of Florida.  Again, the whistleblower was a former ATI Enterprises employee.  These individuals deserve our thanks for performing a national public service and highlighting instances of government programs fraud.

The $3.7 million settlement will be paid from funds supporting three letters of credit that ATI provided to the Department of Education. In addition to the settlement arranged by the Department of Justice, the Department of Education will disburse from the letter of credit funds $2 million for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.
If you are aware of government programs fraud, learn from the example of ATI Enterprises’ employees.  You can file your own lawsuit and share in any recovery.  For more information on filing a qui tam lawsuit, please call (202) 973-0900 or fill out a Confidential Case Evaluation form.

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Our experienced qui tam attorneys are available for a confidential, no-cost, no-commitment, initial evaluation of your case. Call us now at (202) 973-0900, or begin the process by completing our Confidential Case Evaluation Form.
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