American Commercial Colleges, Inc. (“ACC”) has agreed to pay up to $2.5 million to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with certain eligibility requirements of the federal student aid programs.
In order to be eligible to participate in federal student aid programs, for-profit colleges such as ACC may not obtain more than ninety percent of their annual revenues from Title IV student aid programs. At least ten percent of their revenues must come from other sources, such as payments from students using their own funds or private loans independent of Title IV.
The civil settlement resolves allegations that ACC violated the False Claims Act when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds to artificially inflate the amount of private funding ACC counted for purposes of the 90/10 Rule. The short-term loans at issue in this case were not sought or obtained by students on their own; rather, the United States argued that ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.
This case was filed under the qui tam provisions of the False Claims Act by former directors of certain ACC campuses. As a reward for exposing the False Claims Act violations, these whistleblowers will receive between $170,000 and $425,000.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/May/13-civ-630.html