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Santee Christian College to Pay $225,000 Over Federal Violations on Recruiting

San Diego Christian College in Santee will pay $225,000 to resolve allegations that it compensated a student recruiting company in violation of a federal ban on incentive-based compensation, the Department of Justice announced Monday.

The university’s settlement resolves allegations that it hired student recruiting company Joined Inc. between 2014 and 2016 to recruit prospective students to SDCC and paid the company a share of the tuition SDCC received from enrolled, recruited students.

Title IV of the Higher Education Act prohibits institutions receiving federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment, according to the Department of Justice.

“Higher education enrollment decisions should put students first,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “Offering recruiters financial incentives to enroll students undermines students’ ability to make educational decisions in their own best interests.”

The settlement stems from a lawsuit brought by an unnamed whistleblower, who will receive $33,750 of the settlement proceeds, according to the DOJ.

In a statement, a college spokesman said Tuesday: “Due to the anticipated costs of prolonged litigation as well as the distraction from the pursuit of its mission, SDCC’s Board of Trustees decided that it is in its best interest to come to this resolution. In addition to denying the allegations of the complaint, SDCC assures its students, faculty, staff, alumni, stakeholders, and the public that at no time did it submit a “false claim” to the government nor misuse federal taxpayer funds. This settlement concludes the government investigation into SDCC’s relationship with [Maurice] Shoe,”  co-owner of Joined Inc., a California-based student recruiting company.

Reuben Guttman, who represents the whistleblower, told Times of San Diego that his client
lives on the West Coast.

“The case named three defendants: Oral Roberts, North Greenville University and San Diego Christian,” Guttman said. “This marks the third settlement, and approximately $3 million has been recovered.”

He said the settlement with San Diego Christian was small because it reflects the school’s financial condition and ability to pay.

“The settlement is being paid in installments,” Guttman said.

Neil Sanchez is special agent in charge of the U.S. Department of Education Office of Inspector General’s Southern Regional Office.

“Today’s settlement is a result of the hard work and effort of the Office of Inspector General and the Department of Justice to protect and maintain the integrity of the Federal student aid programs,” Sanchez said. “We will continue to work together to ensure that Federal student aid funds are used as required by law. America’s taxpayers and students deserve nothing less.”

Source: The Time of San Diego, https://timesofsandiego.com/education/2020/10/19/santee-christian-college-to-pay-225000-over-federal-violations-on-recruiting/

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California University To Pay $225,000 For Allegedly Violating Ban On Incentive Compensation

Department of Justice, October 19, 2020

WASHINGTON – San Diego Christian College (SDCC), based in Santee, California, will pay $225,000 to resolve allegations under the False Claims Act for submitting false claims to the U.S. Department of Education in violation of the federal ban on incentive-based compensation, the Justice Department announced today.    

Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment.  The incentive compensation ban protects students against admissions and recruitment practices that serve the financial interests of the recruiter rather than the educational needs of the student.

“Higher education enrollment decisions should put students first,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division.  “Offering recruiters financial incentives to enroll students undermines students’ ability to make educational decisions in their own best interests.”

“Colleges should be places for students to learn and grow, not places to be taken advantage of by recruiters watching out for the own financial interests,” said U.S. Attorney Peter M. McCoy, Jr. for the District of South Carolina.  “This office will continue its efforts to protect students against illegal recruiting practices.”

“Today’s settlement is a result of the hard work and effort of the Office of Inspector General and the Department of Justice to protect and maintain the integrity of the Federal student aid programs,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Southern Regional Office.  “We will continue to work together to ensure that Federal student aid funds are used as required by law. America’s taxpayers and students deserve nothing less.”

The settlement, which was based on SDCC’s ability to pay, resolves allegations that between 2014 and 2016, SDCC hired Joined, Inc., a California-based student recruiting company, to recruit students to SDCC.  The United States contended that SDCC compensated Joined with a share of the tuition that SDCC received from the enrollment of recruited students, in violation of the prohibition on incentive compensation. 

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblowerprovisions of the False Claims Act by Maurice Shoe, the co-owner of Joined.  The Act permits private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  As part of today’s resolution, the whistleblower will receive $33,750.

This matter was investigated by the U.S. Attorney’s Office for the District of South Carolina and the Civil Division’s Commercial Litigation Branch.  Investigative assistance was provided by the Office of Inspector General of the Department of Education.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.  The case is captioned United States ex rel. Shoe v. San Diego Christian College, No. 6:16-cv-01570 (D.S.C.).

Source: https://www.justice.gov/opa/pr/california-university-pay-225000-allegedly-violating-ban-incentive-compensation

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ON-Demand Podcast: Covid-19 Whistleblower and Qui Tam CLE: Collecting Evidence & Making the Claim



Learn the latest on Mastering Bad Faith & Covid-19 Litigation with this convenient, 24/7 On-demand Seminar & Complimentary Podcast. Register to obtain CLE & MCLE credit, online access to complete course & reference materials, and attend this on-demand seminar. YOU MAY LISTEN FROM ALMOST ANY TYPE OF COMPUTER OR IPOD. ACCESS TO THE RECORDING AND MATERIALS DOES NOT EXPIRE.

Benefits:

Over the past two decades, nearly $30 billion has been recovered through Qui Tam cases under the False Claims Act. The demand for attorneys in this surging area has become even stronger as the federal government has spent over $6 trillion in response to the rapid spread of the Coronavirus, or Covid-19. As it becomes apparent that some recipients of the funds are not adhering to requisite protocols, there is an immediate need for attorneys to represent clients in this lucrative area of law. There is also a tremendous need for attorneys fluent in class action litigation & defenses for parallel matters stemming from Qui Tam claims. In particular, attorneys must be fluent on complaints, defenses, litigation strategies, discovery and government incentives, among others. The faculty for this seminar features three of the nation’s leading authorities in this practice. Registration includes online access to course and reference materials.

Agenda:

Covid-19 Whistleblower and Qui Tam CLE: Collecting Evidence & Making the Claim:

a. Legal Issues involving the Coronavirus/Covid-19

b. Earning Fees from Whistleblower, Qui Tam and False Claims Actions

c. Filing Winning Complaints

d. Latest Developments in Qui Tam & Whistleblower Claims

e. Obtaining Large Rewards through Government Incentives

f. Key Procedural Distinctions in Retaliation Claims

g. Overcoming & Responding to Defenses

h. Effective Use of Key Documents & Evidence

i. Cutting-edge Strategies in False Claim Cases

j. Ethical Issues

k. Parallel Class Actions

l. Class Certification

Recorded Question & Answer Session

Biography of Seminar Faculty:

1. Reuben Guttman is a founding member of Guttman, Buschner & Brooks PLLC. His practice involves complex litigation and class actions. He has represented clients in claims brought under the Federal False Claims Act, securities laws, the Price Anderson Act, Department of Energy statutes and regulations, the Worker Adjustment and Retraining Notification Act (WARN), Racketeer Influenced and Corrupt Organizations Act (RICO) and various employment discrimination, labor and environmental statutes. He has also tried and/or litigated claims involving fraud, breach of fiduciary duty, antitrust, business interference and other common law torts. The International Business Times has called Mr. Guttman “one of the world’s most prominent whistleblower attorneys.” He has served as counsel in some of the largest recoveries under the False Claims Act. Mr. Guttman served as lead counsel in a series of cases resulting in the recovery of more than $30 million under the Federal Fair Labor Standards Act. Mr. Guttman is the author and/or editor of numerous articles, book chapters, and technical publications and his commentary has appeared in Market Watch, American Lawyer Media, AOL Government, Accounting Today, and the Jerusalem Post. In addition to his writings, Mr. Guttman has testified before committees of the United States House of Representatives and the United States Senate on the Asbestos Hazard Emergency Response Act (AHERA). In 1992, he advised President-elect Clinton’s transition team on labor policy and worker health and safety regulation. Mr. Guttman earned his law degree at Emory University School of Law, where he has been appointed as a Senior Fellow and Adjunct Professor at the Emory University School of Law Center for Advocacy and Dispute Resolution and has been a Team Leader for the school’s Trial Techniques Program.

2. Shauna Itri is a Partner at Seeger Weiss LLP, where she has been leading litigation teams in complex fraud cases in both state and federal courts for over a decade. Her nationwide practice has focused on representing plaintiffs in various settings including securities and consumer class actions; antitrust; and cases involving patient harm. Shauna also has extensive experience representing whistleblowers in False Claims Act lawsuits, and tax and securities whistleblowers with claims under the IRS and SEC whistleblower programs. Ms. Itri is a nationally recognized speaker and has published numerous articles on representing whistleblowers and litigating Qui Tam claims. She served on the litigation teams working on the multi-billion-dollar lawsuits brought against BMW, General Motors, Ford Motors, and Mercedes for allegedly disguising the actual emission levels of their diesel engine cars. The settlement figure in these cases make them the largest auto-related consumer class-action settlement in U.S. history. Ms. Itri was a member of trial team of False Claims Act case which settled for $120 million, in two cases that alleged that a defendant defrauded the government by providing kickbacks to nursing homes. Ms. Itri was part of a litigation team that worked extensively with the Department of Justice and State Attorneys General across the nation representing whistleblowers in a series of False Claims Act cases against drug companies for fraudulent Medicaid and Medicare drug pricing which has led to more than $3 billion in recoveries. She is a graduate of Stanford University and Villanova University.

3. Jennifer A. Riley is a Partner at Seyfarth Shaw LLP, where she defends companies facing class actions, collective actions, pattern or practice lawsuits, and other types of representative proceedings, ranging in size from dozens to tens of thousands of claims. For nearly two decades, Ms. Riley has defended companies faced with significant complex litigation matters. As such, she works on the forefront of the developing law in an ever changing arena. Ms. Riley regularly develops strategies for navigating some of the largest challenges faced by corporate America today and counsels employers confronted with a range of complex employment law theories that span from claims of discrimination or sexual harassment to myriad types of alleged wage & hour violations. She is a regular speaker and presenter regarding developments in the law and challenges on the horizon. Ms. Riley has extensive litigation experience. She has represented clients facing bet-the-company cases in a wide range of complex civil litigation matters in federal and state courts across the country. Ms. Riley has served as trial counsel in federal court bench trials, jury trials, and arbitration proceedings. She has successfully defended a multitude of actions by securing dismissal, defeating class or collective action certification, prevailing on summary judgment, and structuring and securing approval of complex and multiparty settlements and consent decrees. Ms. Riley also routinely counsels employers to navigate thorny employment issues, including through investigations and terminations. she is a graduate of the University of California at Berkeley School of Law.

CLE Credit: Rossdale CLE is a national leader in attorney education and has trained thousands of attorneys, paralegals, and other legal professionals.

Learn more at https://www.mcssl.com/store/legalresourcesinc/catalog/product/29aaead722c8417dabf0b37b00a97efe

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Wisconsin Based APM Settles FCA Suit

The DOJ accounted that federally funded Advanced Pain Management Holdings Inc. and its subsidiaries, collectively called APM Entities, have agreed to pay the government $885k to settle a qui tam False Claims Act suit. The complaint alleges that the companies illegally gifted stock shares to non-employee physicians, in violation of the Anti-kickback Act, as compensation based on the number of patient referrals and pain management procedures provides. In addition to offering illegal kickbacks, APM was accused of providing medically unnecessary urine tests, resulting in more testing than was supported by medical records. The whistleblower will receive $142k as her share of the recovery.

Learn more here: https://www.justice.gov/opa/pr/wisconsin-pain-management-companies-settle-false-claims-act-allegations

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Gilead Inc. Agrees to $97m FCA Settlement

The Justice Department has announced that California based pharmaceutical company Gilead Sciences, Inc. has agreed to pay $97 million to settle allegations of fraud. Whistleblowers accused the company of using a foundation to illegally pay the prescription copays for a hypertension drug, Letairis, for millions of Medicare patients. Drug companies are prohibited, under the Anti-kickback Statute, from directly or indirectly incentivizing patients to purchase their drug; by covering the copay for Letairis patients, Gilead was able to increase the drug’s price to what would have otherwise resulted in prohibitively expensive copays. The Justice Department stated that price manipulation and unscrupulous subsidization of a company’s own drugs are exactly the types of behavior the Medicare copay structure was designed to prohibit, and that this settlement demonstrates the government’s emphasis on combatting healthcare fraud.

Learn more here: https://www.justice.gov/opa/pr/gilead-agrees-pay-97-million-resolve-alleged-false-claims-act-liability-paying-kickbacks

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