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U.S. Intervenes in False Claims Act Case Naming For-Profit Career Schools

The Department of Justice announced that it has intervened in a whistleblower lawsuit against Texas-based ATI Enterprises, Inc. (“ATI”) for allegedly abusing the federal student aid program in violation of the False Claims Act. ATI operates sixteen for-profit career schools in Florida, Texas, Oklahoma and New Mexico under the names ATI Technical Training Center, ATI Career Training Center and ATI Career Training.

The lawsuit was initially brought by six former ATI employees, Portia Aldridge, Tiffany Turner, Monica Lewis, James Lewis, Nathan Wallace, and Lori Jackson, under the qui tam provisions of the False Claims Act. According to the complaint, over a three year period, multiple ATI campuses in Texas submitted false information concerning their job placement statistics to the Texas Workforce Commission in order to retain their state licenses. The complaint alleges that ATI would be ineligible to receive federal financial aid payments under Title IV of the Higher Education Act of 1965, as amended, without state licensure.

The government alleged that employees in three Dallas-area campuses also knowingly enrolled students who did not meet the school’s eligibility requirements because they did not have high school diplomas; created fictitious high school diplomas; did not drop students with poor grades or attendance; and knowingly misrepresented to students their future employability, potential salaries and the school’s job placement success rates.

According to whistleblowers’ and the government’s complaints, ATI engaged in these practices in order to induce students to enroll and increase ATI’s receipt of federal student loan dollars.

Under the False Claims Act, the whistleblowers will be entitled to a portion of any recovery by the United States.