Whistleblower Partners is proud to announced that on April 26, 2024, the United States intervened in a False Claims Act case against Study Across the Pond (“ATP”), an educational recruitment company, which was initiated by our client. For years, ATP placed U.S. college students in universities across the United Kingdom, offering to help them with their admissions paperwork and, crucially, applications for federal financial aid. The U.K. schools in turn would pay ATP for their recruitment of students to their campuses. However, as alleged in the Government’s complaint, ATP would charge these universities on a per-student basis, in violation of what is known as the “incentive compensation ban.”

The incentive compensation ban provides that any educational recruitment company representing students that receive federal financial aid may not be paid on a per-student basis. The prohibition is designed to disincentivize recruitment companies from attempting to maximize their profits by recruiting students who might not be fully qualified or are otherwise ill-equipped to take on student loans. Such students bear a greater risk of ultimately defaulting on their loans, thus harming both student and the government.

Despite the clear prohibition, as alleged by the Government, ATP designed all of their contracts to pay on a per-student basis. In some cases, they allegedly hid their incentivized contract structure by creating sham agreements with the universities that purported to pay on a flat fee basis, all the while having side agreements where the parties agreed that the “flat fee” would be adjusted based on the number of students recruited.

This alleged fraud was brought to the attention of the Government by our whistleblower client who filed a qui tam complaint to alert the Government to ATP’s misconduct. We are proud to represent this client alongside our co-counsel Erica Hitchings of Whistleblower Law Collaborative LLC and Gordon Schnell of Constantine Cannon LLP. Many WP attorneys contributed to this matter, led by Poppy Alexander, Mary Inman, and Harry Litman. After the Government investigated the whistleblower’s claims, it filed its Complaint-in-Partial-Intervention.

This Complaint is notable because there have been very few intervened cases related to incentive compensation ban violations in the past. It is good to see the Government actively working to stop this kind of fraud, and to protect the students harmed by shameless recruiting practices. Prior large settlements in these area have included Washington v. EDMC, where Harry was the lead counsel for the whistleblower and which resulted in the largest ever education fraud settlement under the False Claims Act.

As whistleblower counsel, we look forward to continuing to work closely with the Government as this case progresses.

To read more about how the False Claims Act can stop education fraud, click here.