US: Suit against university nets $78.5 million settlement

Lawyers struck a $78.5 million deal in a long-running false claims suit that accused the University of Phoenix of rewarding recruiters for enrolling students, according to a settlement agreement announced on Monday, writes Kate Moser for The Recorder.

The agreement, which includes $11 million in attorney fees for the plaintiffs, is among the largest settlements ever of a False Claim Act fraud case in which the government did not intervene, said Eric Havian, a qui tam expert and partner with Phillips & Cohen in San Francisco who was not involved in the case.

Former University of Phoenix enrolment counselors Mary Hendow and Julie Albertson filed the suit in 2003, accusing the university of defrauding the government by paying counsellors incentive payments for enrolling students. Under Title IV of the Higher Education Act, universities that qualify for student aid are barred from paying incentives, like commissions and bonuses, to recruiters to boost enrolment.
Full report on The Recorder site