June 12e, the US Department of Justice (DOJ) announced a settlement with Metro Beauty Academy (MBA), a private beauty school located in Allentown, Pennsylvania. MBA will pay $ 425,000 to resolve allegations of its involvement in a federal student financial aid fraud program.
A whistleblower alleged that MBA had submitted applications for federal student financial aid on behalf of students who were not eligible for such financial aid. These fraudulent actions spanned from January 2009 to December 2013, and the allegations also include admission by the MBA of students who did not have the appropriate certifications. The United States alleges that in some cases, the MBA “created bogus degrees for students, or encouraged students to obtain bogus degrees from” degree factories. “
A whistleblower filed a lawsuit against MBA under the False Claims Act (FCA), which under the FCA qui tamThe provisions can “sue on behalf of the United States and get part of the recovery from the government”. The whistleblower, or “relator”, will receive part of the settlement of $ 425,000.
“When schools agree to participate in the federal Title IV financial aid program, they must comply with regulations designed to ensure that qualified students have access to higher education,” said US Attorney William M. McSwain. He went on to say that fraud cases like this are not only detrimental to law-abiding educational institutions, but also unfair to students attending other schools “who may find themselves unqualified for a job and riddled with debt ”.
Finally, McSwain said, “We thank the Relator and Relator’s Counsel for their invaluable contribution to this matter. Without information from citizens like the rapporteur, fraud detection and retention of government program funds would be much more difficult. “