Helicopter flight training company, community college settle False Claims Act allegations for $7.5 million

by Ben Vernia | August 16th, 2022

On August 15, the Department of Justice announced that a flight instruction company, Universal Helicopters, Inc., and Dodge City Community College had agreed to resolve a whistleblower’s allegations that they violated the False Claims Act, for a settlement totaling $7.5 million. According to DOJ’s press release:

Universal Helicopters Inc. (UHI), a private helicopter flight instructor training company, and Dodge City Community College (DC3), which operates campuses in Dodge City, Kansas, and Chandler, Arizona, have agreed to pay $7.5 million to resolve allegations that they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs (VA) in connection with the helicopter flight instructor training program jointly run by UHI and DC3.

The VA provided financial assistance as part of the Post-9/11 GI Bill to veterans taking classes at the UHI-DC3 helicopter flight instructor program. The United States alleged that from 2013 to 2018, UHI and DC3 made or caused to be made false statements to the VA regarding enrollment in the UHI-DC3 helicopter flight instructor program in order to obtain VA funding. UHI has agreed to pay $7 million and DC3 has agreed to pay $500,000 to settle these allegations. The settlement with DC3 is based on its ability to pay.

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As part of the Post-9/11 GI Bill program, the VA provides tuition and fee payments directly to qualifying schools on behalf of eligible veterans. To qualify for the program, among other things, a school is required to certify to the VA that no more than 85 percent of the students for any particular course are receiving VA benefits. This requirement, commonly referred to as the “85/15 Rule,” is intended to prevent abuse of Post-9/11 GI Bill funding by ensuring that the VA is paying fair market value tuition rates since at least 15 percent of the enrolled students would be paying the same rate with non-VA funds. To determine whether it is in compliance with the 85/15 Rule, a school compares the full-time non-VA supported students enrolled in a particular course to the full-time veteran students enrolled in that same course. A separate ratio must be computed for each course of study.

The settlements resolve allegations that from 2013 to 2018, UHI and DC3 falsely certified compliance with the 85/15 Rule when the UHI-DC3 helicopter flight instructor program included certain expensive classes that were taken almost exclusively by veterans. In addition, in its settlement with DC3, the United States alleged that to reach the required 15 percent threshold, DC3 counted part-time students enrolled in only one online class per semester as full-time students, in violation of VA rules.

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The whistleblower who brought the case, a veteran and former student of the program, will receive $1.125 million of the settlement (a 15% relator’s share).

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