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University to Pay $2.5 Million to Settle False Claims Act Allegations of Using Fraudulent Recruitment Practices

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University to Pay $2.5 Million to Settle False Claims Act Allegations

On Monday, February 11, 2019, the Department of Justice announced that North Greenville University (NGU) agreed to pay $2.5 million to settle a lawsuit filed under the qui tam, or whistleblowerprovisions of the False Claims Act. The lawsuit alleged that the NGU, based out of South Carolina, submitted false claims to the U.S. Department of Education by allowing an incentive-based compensation system to recruiters that secured more student enrollment. This type of compensation is prohibited because it serves the pockets of the University and the recruiter rather than the educational interest of the students.

Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said: “Prospective students are entitled to make enrollment decisions without the improper influence of recruiting companies who pursue their own financial gain at the expense of the students’ best interests.”

The qui tam action alleged that NGU hired Joined, Inc to recruit students and compensated the company based on the number of students they were able to enroll in a program at the University between 2014 to 2016.

In this case, the whistleblower will receive a $375,000 award for exposing the fraud and the qui tam lawsuit should “serve as a warning” to other educational institutions against using such recruitment tactics.

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