United States Files Complaint Against Stevens-Henager College, Inc. Alleging False Claims Act Violations for Illegal Recruiting
The United States has filed a complaint under the False Claims Act against Stevens-Henager College, Inc. and its owner, The Center for Excellence in Higher Education, for illegally compensating recruiters, the Department of Justice announced today. Stevens-Henager operates a chain of for-profit colleges in Idaho and Utah.
“Congress has made clear that colleges should not pay improper incentives to admissions recruiters,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice and the Department of Education are working together to combat unlawful recruitment practices that can harm students and result in the waste of taxpayer funds.”
In its complaint, the government alleged that the college falsely certified compliance with provisions of federal law that prohibit a university from paying incentive-based compensation to its admissions recruiters based on the number of students they recruit. Congress enacted the prohibition on such incentive compensation to curtail the enrollment of unqualified students, high student loan default rates, and the waste of student loans and grant funds.
The claims alleged by the United States were initiated by a whistleblower lawsuit filed by two former Stevens-Henager employees under the False Claims Act, which allows private citizens to file suit over false claims on behalf of the government. The act provides for the recovery of triple damages and penalties, and allows the government to intervene and take over the allegations, as it has done in this case. The whistleblower is entitled to a share of any recovery obtained in the lawsuit.
“Fighting fraud and protecting federal tax dollars from abuse is a priority for this office,” said U.S. Attorney Wendy Olson for the District of Idaho. “The False Claims Act is an important tool for doing just that. Whistleblowers are necessary to our ongoing efforts to combat fraud, waste and abuse.”
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Idaho, and the Department of Education, Office of Inspector General. The case is captioned United States ex rel. Brooks v. Stevens-Henager College, Inc., et al., Case No. 1:13-CV-00009-BLW (D. Id.). The claims asserted are allegations only, and there has been no determination of liability.