oversight

Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial Aid. Dallas, TX., August 22, 2013

Published by the Department of Education, Office of Inspector General on 2013-08-22.

Below is a raw (and likely hideous) rendition of the original report.

OIG Investigative Reports, Dallas, TX., August 22, 2013 - Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial Aid
Skip to main contentAbout UsContact UsFAQs Language Assistance Englishespañol中文: 繁體版Việt-ngữ한국어TagalogРусский
U.S. Department of Education
Search for:
Toggle navigation
U.S. Department of Education
Student Loans
Grants
Laws
Data
About ED
OFFICES
Home
Reports & Resources
Programs/Initiatives
News
Office Contacts
Investigation Report
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, August 22, 2013
Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial Aid
Schools Located in Texas, Florida, New Mexico and Oklahoma
ATI Enterprises Inc. will pay the government $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs' eligibility requirements and submitted claims for ineligible students, the Justice Department announced today.
"Federal financial aid is meant to help students obtain a quality education from an eligible institution, and the Department of Justice is committed to ensuring colleges comply with the rules to make certain that happens," said Stuart F. Delery, Assistant Attorney General for the Civil Division.
Allegedly, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics to maintain its state licensure and accreditation.   To participate in federal student aid programs, as authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV), schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms.   For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements.   The government alleged that, by misrepresenting its job placement statistics, ATI Enterprises fraudulently maintained its eligibility for federal financial aid under Title IV.
The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools.   This falsely increased the schools' enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.
"Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education," said Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, where some of the ATI campuses involved in the lawsuit are located.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said:   "Federal financial aid is there to help students attain their dreams and goals, and misuse of these funds to increase corporate profits is unacceptable.   We are committed to ensuring that federal student aid is used for the benefit of students."
The settlement amount will be paid from funds supporting three letters of credit that ATI provided to the Department of Education.   In addition to the False Claims Act settlement, 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.
"Federal student aid exists so that students can make the dream of a higher education a reality.   That's why misuse in any way of these vital funds cannot be tolerated," said Kathleen Tighe, Inspector General of the U.S. Department of Education.  "I'm proud of the work of OIG special agents for holding ATI Enterprises accountable and for protecting the integrity of federal education dollars."
The settlement resolves allegations made in two separate complaints against ATI Enterprises Inc., and related entities filed under the False Claims Act's qui tam, or whistleblower, provisions, which permit a private individual to file suit for false claims to the government and to share in any recovery.   The first complaint, U.S. ex rel. Aldridge, et al. v. ATI Enterprises Inc., et al., was filed in July 2009 in the U.S. District Court for the Northern District of Texas.   The second complaint, U.S. ex rel. Ramirez-Damon v. ATI Enterprises Inc., was filed in July 2011 in the U.S. District Court for the Southern District of Florida.
This matter was investigated by the Commercial Litigation Branch of the Justice Department's Civil Division, the U.S. Attorney's Office for the Northern District of Texas, the U.S. Attorney's Office for the Southern District of Florida, and the Department of Education's Office of Inspector General and Office of General Counsel.   The claims settled by this agreement are allegations only, and there has been no determination of liability.
13-953
Top
Printable view
Last Modified: 09/03/2013
How Do I Find...
Student loans, forgiveness
College accreditation
No Child Left Behind
FERPA
FAFSA
1098-E Tax Form
2015 Budget Proposal
More >
Information About...
Transforming Teaching
Family and Community Engagement
Early Learning
K-12 Reforms
More >
Connect
Facebook
Twitter
YouTube
Email
RSS
Google+
More >
MISUSED
FOIA
OIG Fraud Hotline
Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.
Student Loans
Repaying Loans
Defaulted Loans
Loan Forgiveness
Loan Servicers
Grants & Programs
Apply for Pell Grants
Grants Forecast
Open Grant Competitions
Find Grant Programs by Eligibility
Laws & Guidance
No Child Left Behind
FERPA
Civil Rights
Data & Research
Education Statistics
Postsecondary Education Data
State Education Data
Nation's Report Card
What Works Clearinghouse
About Us
Contact Us
ED Offices
Jobs
News
FAQs
Budget, Performance
Notices FOIAPrivacySecurityInformation qualityInspector GeneralWhitehouse.govUSA.govBenefits.govRegulations.gov