University of Phoenix Settles False Claims Act Lawsuit for $67.5 Million

February 2nd, 2010 by Qui Tam

The University of Phoenix has agreed to pay $67.5 million to the United States to resolve allegations that its student recruitment policies violated the False Claims Act.  Two former University of Phoenix employees alleged that the University accepted federal student financial aid in violation of statutory and regulatory provisions that prohibit post-secondary schools from paying admissions counselors certain forms of incentive based compensation tied to the number of students recruited.  For bringing this alleged fraud to light, the two whistleblowers will receive $19,000,000 from the settlement.

Notably, the United States did not intervene in this action, although it did provide support and assistance to the whistleblowers at many stages of the litigation, including filing briefs with the court when the case was on appeal to the 9th Circuit Court of Appeals. 

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