DOJ intervenes in whistleblower suit against Texas for-profit college

by Ben Vernia | March 4th, 2012

On February 28, the Department of Justice announced that it was intervening in a qui tam suit against Texas-based American Commercial College, Inc. According to DOJ’s announcement:

The United States has intervened in a whistleblower suit pending under the False Claims Act against American Commercial College Inc. (ACC), a chain of for-profit colleges located in west Texas.

The government alleges that ACC falsely certified compliance with provisions of federal law that prohibit a college or university from obtaining more than 90 percent of its yearly tuition from federal student aid provided through the U.S. Department of Education. Congress enacted the “90/10 Rule” to ensure that educational institutions are able to attract funding from outside sources.
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The suit was originally filed by Shawn Clark and Anthony Delgado, former ACC employees. The False Claims Act allows for private citizens to file whistleblower suits to provide the government information about wrongdoing. The government then has a period of time to investigate and decide whether to take over the prosecution of the allegations or decline to pursue them and allow the whistleblower to proceed. If the United States proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim. When the government intervenes, the whistleblower can collect a share of 15 to 25 percent of the United States’ recovery. The government will file its own complaint shortly.

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