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U.S. Intervenes in WLC Client’s Case Alleging Education Fraud Violations of the Incentive Compensation Ban

May 10, 2024

WLC is proud to announce that the government has intervened in a client’s qui tam case alleging violations of the incentive compensation ban.

On April 26, 2024, the United States partially intervened in a whistleblower-initiated False Claims Act (FCA) case alleging education fraud by Study Across the Pond (ATP).  ATP is an educational recruitment company. For years, ATP placed U.S. college students in universities across the United Kingdom.  ATP offered to help them with their admissions paperwork and, crucially, applications for federal financial aid. The U.K. schools in turn would pay ATP for its recruitment of students to their campuses. According to the complaint, ATP charged the universities on a per-student basis.  This violates the “incentive compensation ban.”

What is 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, ATP allegedly designed all of its contracts to pay on a per-student basis. In some cases, it hid its incentivized contract structure by creating sham agreements with the universities purportedly paying on a flat fee basis.  In reality, they had side agreements to adjust the “flat fee” based on the number of students recruited.

Our Client Blew the Whistle on this Fraud 

Our whistleblower client alerted the Government to ATP’s misconduct by filing a qui tam complaint. The whistleblower in this matter is represented by Poppy Alexander of Whistleblower Partners LLP, Erica Blachman Hitchings of Whistleblower Law Collaborative LLC, and Gordon Schnell of Constantine Cannon LLP. After the Government investigated the whistleblower’s claims, it brought its Complaint-in-Partial-Intervention.

This Complaint is notable because there have been very few intervened cases related to incentive compensation ban violations. It is good to see the Government actively working to stop this kind of fraud.  In addition, the Government’s efforts will protect the students harmed by shameless recruiting practices.

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

A link to the Government’s complaint is here.