Charlotte School of Law, a for-profit school, closed in August amid charges that it defrauded taxpayers out of $285 million over a five-year period. Whistleblower Barbara Bernier, a law professor, says the school cheated to circumvent American Bar Association accreditation and federal funding requirements. Her whistleblower lawsuit, filed under the federal False Claims Act, remains ongoing. One egregious example related by Bernier involves the school paying at-risk students to not take the bar exam so that the school would not lose accreditation due to a low bar passage rate.
In addition to Professor Bernier’s allegations, the school faces several state and federal lawsuits from disgruntled students stuck with thousands of dollars in student debt following the school’s closure. The North Carolina attorney general has opened a civil fraud investigation.
Fraud in the for-profit education sector has been a widespread problem for years. In 2015, Beasley Allen clients were instrumental in shutting down Corinthian Colleges, a for-profit school with campuses throughout the United States. Whistleblowers from the school’s Atlanta campus, who were primarily admissions and financial aid officers, disclosed the school’s scheme to inflate attendance, grades, and job placement rates in order to maintain accreditation and keep the spigot of federal dollars flowing. Due to the whistleblowers’ efforts, Corinthian Colleges filed bankruptcy and closed all its campuses nationwide.
While schools may pay fines, file bankruptcy, and even close, the bad actors – executives, administrators, and complicit faculty – are rarely punished. The true victims are the students, who in many cases have wasted several years and thousands of dollars on worthless, unaccredited degree programs. Student debt forgiveness by third-party lenders is often unavailable.
Lawyers at Beasley Allen continue to investigate whistleblower claims related to the misuse of federal funds in the for-profit education industry. Recruiters, admissions counselors, and career services personnel are often in the best position to uncover such fraud. Successful whistleblowers are rewarded with a percentage of the recovery obtained on behalf of the government. For further information, contact Archie Grubb or Andrew Brashier, lawyers in our firm who are on the Whistleblower Litigation Team, at 800-898-2034 or by email at Archie.Grubb@BeasleyAllen.com or Andrew.Brashier@BeasleyAllen.com.
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