An Abuse of Trust: Colleges and Universities Committing Federal Grant Fraud

Recently, our firm reported on the problem of institutions of higher learning abusing the public’s trust and breaking the law in connection with federal student loans and federal laws on student recruitment.  Sadly, those are not the ways colleges and universities abuse and misuse federal taxpayer funds.  Our education fraud attorney is closely monitoring developments involving federal education grant fraud.  These frauds are a form of theft from the American taxpayers and they also divert money from important education and research programs.

School Agrees to Pay $4 Million to Settle Education Grant Fraud Claims

In March, a federal court sitting in Sacramento announced that Bard College agreed to pay $4 million to resolve claims initially raised by two former students who attended a Master of Arts program at Paramount Bard Academy in California via the False Claims Act’s (“FCA”) qui tam provisions.  The government later intervened in the case.  classroomThe lawsuit alleged that Bard, a nonprofit school based in New York state, received funds from the Department of Education’s Teacher Quality Partnership Grant Program but failed to comply with the grant’s conditions.  Additionally, the suit claimed that Bard abused Title IV student loan money by applying funds to campuses that had not yet received necessary accreditation.  Although Bard agreed to pay to settle the case, it is important to note the school did not admit to the allegations in the complaint.

Commenting on the Bard settlement, United States Attorney Benjamin Wagner said “When institutions of higher education opt to participate in loan and grant programs administered by teh [sic] Department of Education, their participation comes with conditions designed to protect the institution’s students and the integrity of the Department of Education’s programs.”  Ted Mitchell, U.S. Education Under Secretary, emphasized that the suit demonstrates the government’s commitment “to protect students, families, and taxpayers.”

Not a New Fight: An Earlier Example of School Accused of Cancer Research Grant Fraud

This was not the first time the FCA was used to bring allegations that a school misused federal grant funds.  In 2013, the Department of Justice announced that Northwestern University agreed to pay $2.93 million to settle claims it misused cancer research grant funds.  According to the claims initially brought by a former employee, the school allowed a researcher to submit false claims for reimbursement from federal research grants provided by the National Institutes of Health over a six-and-a-half-year period.  Northwestern did not admit to liability as part of the settlement agreement.

Once again, comments from the government officials involved with the case help reveal the importance of the FCA and cases involving education grant fraud.  United States Attorney Gary Shapiro notes that misuse of federal grant money violated the public’s trust and a Health and Human Services official explains ““The mismanagement or improper expenditure of grant funds is unacceptable and will not be tolerated…[the government] will continue to diligently investigate allegations of this nature to ensure that taxpayer dollars are being properly utilized.”

Using the FCA to Fight Fraud

As a False Claims Act law firm, we know that private whistleblowers are essential to the fight against fraud including the misuse of federal funds by institutions of higher learning.  Colleges and universities, including the prestigious institutions referenced above, must be held accountable when they abuse our trust and misuse federal funds.  These funds are intended to improve education and develop important research including cancer research and other medical studies.  Education grant fraud is ultimately a crime against the American public and we are proud to partner with the men and women who step forward after witnessing these abuses.

If you have witnessed education grant fraud or another form of fraud involving government funds, please call our office to arrange a consultation with one of our government fraud lawyers.  The law protects whistleblowers and rewards them when their claims lead to the recovery of government money.

See Related Blog Posts:

False Claims Act Attorney Examines Federal Student Aid Fraud and Other Forms of Higher Education Fraud

Whistleblowers’ Law Firm Alert: For-Profit Schools Committing Federal Student Aid Fraud

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