We are pleased to announce that the United States has resolved a False Claims Act case alleging incentive compensation ban violations filed by a WLC client. As the United States announced, Study Across the Pond (SATP) and its co-founder have collectively agreed to pay $1.3 million dollars to settle claims that they violated the False Claims Act. Specifically, SATP allegedly violated U.S. rules around how recruitment companies are paid when targeting U.S. students that receive federal loans. SATP is a Massachusetts-based education recruitment company that places U.S. students in U.K. universities.
In partnership with Whistleblower Partners and Constantine Cannon, WLC represented the whistleblower in this landmark education fraud case. Our client will receive $240,500 as the whistleblower’s portion of the recovery. The case is captioned United States ex rel. Hitrost, LLC v. Study Across the Pond, LLC, et al., No. 21-CV-10274-ADB (D. Mass.).
Study Across the Pond Settles Allegations of Incentive Compensation Ban Violations and Resulting False Claims
Our client filed the qui tam complaint in 2021. The Complaint alleged that SATP was violating the Incentive Compensation Ban by signing recruitment contracts with U.K. universities that provided for per-student payments for U.S. students recruited to attend these schools.
The Incentive Compensation Ban conditions higher education institutions’ participation in federal student aid programs upon their agreement not to provide any commission, bonus, or other incentive payment to student recruiters based directly or indirectly on success in securing student enrollments. The Incentive Compensation Ban protects students against aggressive recruitment practices that serve the financial interest of the recruiter rather than the educational needs of the student.
After several years of investigation, the United States intervened in our client’s case. The United States alleged that SATP’s scheme involved at least 28 schools in the UK. Specifically, the United States alleged that SATP demanded a commission for its recruitment services. In many cases, this was money the schools had claimed from the Direct Loan Program for the education of American students. The United States further alleged that SATP created sham records to hide these tuition-sharing arrangements from the Department of Education and ultimately caused foreign schools to submit false claims to the Direct Loan Program.
This is a Landmark Incentive Compensation Ban Matter
The Incentive Compensation Ban has historically been a difficult to enforce area of government priority. The United States has rarely intervened in these matters. Similarly, very few – if any – cases have been brought related to American students studying abroad.
This unique case has had an impact that reaches beyond the United States. It has also helped to facilitate a national conversation in the U.K. around student recruitment practices.
Government Emphasizes That Incentive Compensation Ban Violations Threaten WellBeing of American Students
The government’s press release emphasized the importance of protecting students from individuals and entities placing their profits ahead of the students’ best interests.
My office is committed to ensuring American students are not taken advantage of for financial gain and protecting the integrity of federal student financial aid programs.
U.S. Attorney Leah B. Foley for the District of Massachusetts
American students deserve to make enrollment decisions free of the improper influence of third-party recruiters who pursue their own financial gain rather than the students’ best interests.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division
FCA investigations and litigations require coordination among many government agencies and personnel. Here, they came together to ensure that the federal student loan programs are protected from profiteers.
Today’s settlement is a result of the hard work and effort of the Office of Inspector General, the U.S Department of Education, and the U.S. Department of Justice to protect and maintain the integrity of the Federal student aid programs by enforcing applicable laws, including the incentive compensation ban.
Jason Williams, Assistant Inspector General for Investigation Services, U.S. Department of Education Office of Inspector General
WLC Applauds Client’s Courage and Government’s Commitment to this Case
WLC commends the outstanding efforts of their client and the government prosecutors. AUSAs Alexandra Brazier and Brian LaMacchia, along with DOJ Civil Fraud Trial Attorney Allison Carroll, committed countless hours to this investigation and litigation. They refused to ignore the alleged conduct. We are grateful to each of these dedicated public servants.
In addition, we were incredibly fortunate to work with a great co-counsel team: Poppy Alexander of Whistleblower Partners and Gordon Schnell of Constantine Cannon. Both Poppy and Gordon are relentless fraud fighters; we were honored to work alongside them.
Whistleblower Law Collaborative
Whistleblower Law Collaborative LLC devotes its practice entirely to representing clients nationwide in bringing actions under the federal and state whistleblower laws and programs, False Claims Acts, and other whistleblower programs.
If you are considering becoming a whistleblower for issues relating to incentive compensation ban violations or any other fraud against the public fisc, please contact us for a free, confidential consultation. We have the interest and the expertise to help.