Kaplan For-Profit College Settles Whistleblower Lawsuit

Kaplan For-Profit College Settles Whistleblower Lawsuit with DOJ

Whistleblower LawsuitThe for-profit Kaplan College has agreed to a settlement with the Department of Justice over a whistleblower lawsuit, and will pay $1.3 million.

A former employee of Kaplan, Leslie Coleman, filed the whistleblower lawsuit in 2012, claiming that two of the college’s Texas-based campuses violated Texas standards when hiring professors, and received federal funds for inadequate education services, thus defrauding the government.

Coleman’s whistleblower lawsuit specifically claimed that Kaplan hired unqualified instructors to teach medical assistance courses. Five unqualified instructors taught 4,500 students in the medical assistance program, which cost $2,000 per student. The medical assistant program is designed to train students for entry-level positions in the healthcare field. Many of Kaplan’s students received financial aid through the Pell Grant, a federal grant that helps offset the cost of college for students whose families are low-income.

Although the settlement grants Kaplan the ability to deny liability, the for-profit college has also agreed to refund college tuition for students between 2008 and 2013 who took the college courses from two of the five accused professors. Kaplan says that over 80% of the whistleblower settlement will go to refund those 289 students, “whose student loan debt will decrease as a result of the settlement,” according to the DOJ press release, which notes that “Kaplan fully cooperated with the government’s investigation and negotiated the settlement in good faith.”

“To avoid the expense of protracted litigation, we chose to settle this complaint,” said Janice Block, Kaplan’s Executive Vice President and Chief Legal and Administrative Officer in a statement, adding that the government found no evidence of any harm to Kaplan students. “We have always maintained the allegations contained in this lawsuit were untrue.”

The DOJ has settled other for-profit college whistleblower lawsuits in the past. In 2009, the Apollo Group, which owns the University of Phoenix, settled a whistleblower lawsuit for $78 million. Phoenix was accused of “systematically and intentionally” violating federal regulations against paying recruiters to find students. The DOJ believes that Education Management had similar practices.

The Strom Law Firm Can Help Protect Whistleblowers with the False Claims Act

The False Claims Act, also known as the Whistleblower Act or a qui tam lawsuit, is intended to encourage people to come forward with information and assist the government in stopping the waste of Government funds.

It is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit, in the name of the U.S. Government, charging fraud by government contractors and other entities that receive or use government funds. Bolstered by amendments passed by Congress in 1986, the law has armed private citizens who have independent and direct knowledge of fraud, whether financial institution fraud or Medicare fraud, with a weapon to prosecute government contractors and others who are defrauding the Government.

Common whistleblower actions include:

  • Medicare fraud,
  • defense contractor fraud, and
  • other kinds of fraud.

If you are personally aware of a fraud that has been committed by your current or former employer, a competitor or otherwise, contact the Qui Tam attorneys at the Strom Law Firm today for a no cost consultation to discuss the facts of your case and whether filing a whistleblower lawsuit may be appropriate. We understand the complexity of the False Claims Act, and can help you with your case. We offer free, confidential consultations so contact us for help today. 803.252.4800.

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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