Two whistle blowers sued the University of Phoenix (UOP), alleging that it knowingly violated the Higher Education Act incentive compensation ban, 20 U.S.C. §1094(a) and (a)(20), by paying its counselors based on enrollments. The lawsuit alleged UOP boasted of its deceptions to the Education Department, as executives bragged UOP created “smoke and mirrors” to “fly under the radar” of the Education Department.
In 2004, the Education Department issued a 45-page report confirming the whistle blower allegations, following an investigation consisting of site visits, review of compensation documentation from UOP, and interviews with enrollment directors, managers and 60 enrollment counselors.
In late 2009 the University of Phoenix paid the United States Government 78.5 million dollars in settling the lawsuit. The settlement is among the largest ever of a False Claims Act fraud case where the government declined to intervene.
Co-counsel
Cliff Palefsky
McGuinn, Hillsman & Palefsky, LLP
www.mhpsf.com
Daniel Robert Bartley
Bartley Law Offices
Robert J. Nelson
Lieff, Cabraser, Heimann & Bernstein, LLP
www.lieffcabraser.com
Michael Rubin
Altshuler Berzon LLP
www.altshulerberzon.com
| Document | Download |
|---|---|
| 9th Circuit Opinion United States ex rel. Hendow v. University of Phoenix |
9th.Circuit.Opinion PDF file 92 KB |
| 7th Circuit Opinion United States ex rel. Main v. Oakland City University |
7th.Circuit.Opinion PDF file 91 KB |
| Document | Download |
|---|---|
| United States Department of Education Program Review Report University of Phoenix Site visit of 8/18/2003 - 8/22/2003 |
DOE.report.on.UOP PDF file 6,467 KB |
| National Consumer Law Center
National Consumer Law Center Report Making the Numbers Count: Why Proprietary School Performance Data doesn't Add Up and What Can Be Done About It June 2005 |
Natl.Consumer.Law.Ctr.Rprt PDF file 646 KB |
| Document | Download |
|---|---|
| United States Department of Justice Amicus Brief Brief of the United States in support of the whistleblowers. |
DOJ.amicus PDF file 141 KB |
| Relators' Appellate Brief Filed with the 9th Circuit Appeal to the Ninth Circuit. Case No. 04 16247 |
Opening.Brief PDF file 264 KB |
| Second Amended Complaint for Damages Whistleblower Lawsuit Complaint against University of Phoenix regarding Incentive Compensation Ban Violations. Case No. CIV.S-03-0457 GEB DAD |
Second.Amended.Complaint PDF file 119 KB |
| U.S. Supreme Court Supplemental Brief For Respondents On petition for a writ of certiorari to the United States Court of Appeals for the Ninth Circuit. Case No. 06-1006. |
Supplemental Brief For Respondents PDF file 172 KB |
| Document | Download |
|---|---|
| Consumers Digest Degrees of Difficulty The Truth About Online Universities April 2009. |
Consumers.Digest.2009.march PDF file 6,934 KB |
| BusinessWeek For-Profit Colleges: Scooping Up the Stimulus March 12, 2009. |
Link no longer available |
| Los Angeles Times Case against University of Phoenix stands The Supreme Court refuses to throw out a False Claims Act lawsuit alleging loan fraud. April 24, 2007. |
Case against University of Phoenix stands HTML link |
| KTVU-TV Jim Vargas Reports On Lawsuit That Could Financially Ruin Private University April 24, 2007. |
Video no longer available |
| New York Times Troubles Grow For a University Built on Profits The University of Phoenix became the nation's largest private university by delivering high profits to investors and a solid, albeit low-overhead, education to midcareer workers seeking college degrees. But its reputation is fraying as prominent educators, students and some of its own former administrators say the relentless pressure for higher profits, at a university that gets more federal student financial aid than any other, has eroded academic quality. February 11, 2007. |
(Abstract) Troubles Grow For a University Built on Profits HTML link |
| The Chronicle of Higher Education U. of Phoenix Loses Bid for Review of Decision That Reinstated High-Stakes Lawsuit The University of Phoenix has lost another legal round in its attempt to derail a whistle-blower lawsuit that seeks billions of dollars in damages from the for-profit institution and its parent company, the Apollo Group Inc. Oct. 26, 2006. |
U. of Phoenix Loses Bid for Review of Decision That Reinstated High-Stakes Lawsuit HTML link |
| The Arizona Republic Court revives U. of Phoenix fraud lawsuit A whistle-blower lawsuit alleging financial-aid fraud at the University of Phoenix has been reinstated by a federal appeals court. Sep. 6, 2006. |
Court revives U. of Phoenix fraud lawsuit HTML link |
| Los Angeles Times University of Phoenix Faces Fraud Suit The school is accused of improperly compensating recruiters for signing up unqualified students to get federal funds. Sep. 6, 2006. |
University of Phoenix Faces Fraud Suit HTML link |
| Inside Higher Ed U. of Phoenix Loses in U.S. Court The University of Phoenix must defend itself against charges that it violated federal law by paying its recruiters based on how many students they enrolled, the U.S. Court of Appeals for the Ninth Circuit ruled Tuesday. Sep. 6, 2006. |
Inside.Higher.Ed.9.5.2006.pdf PDF file 116 KB |
| MarketWatch Court revives whistleblower suit vs. University of Phoenix A federal appeals court in San Francisco Tuesday revived a lawsuit that claims Apollo Group Inc.'s (APOL) University of Phoenix defrauded the federal government out of hundreds of millions of dollars. Sep. 5, 2006. |
Court revives whistleblower suit vs. University of Phoenix HTML link |
| The Chronicle of Higher Education Promises and Profits A for-profit college is under investigation for pumping up enrollment while skimping on education Jan. 13, 2006. |
Promises and Profits HTML link |
| CBSNEWS.COM For-Profit College: Costly Lesson Jan. 30, 2005. |
60.MINUTES.SEGMENT1.1.2005 PDF file 49 KB |
| The Arizona Republic Apollo told feds: Inquiry news would cause harm Oct. 19, 2004. |
Arizona.Republic.041019 PDF file 49 KB |
| The Chronicle of Higher Education U. of Phoenix Uses Pressure in Recruiting, Report Says Institution disputes charges that it pumps up enrollment through illegal tactics Oct. 10, 2004. |
U. of Phoenix Uses Pressure in Recruiting, Report Says HTML link |
| The Arizona Republic Student-Recruitment Tactics Blasted By Feds And related stories Sept. 14, 2004. |
Arizona.Republic.040914 PDF file 67 KB |
| The Chronicle of Higher Education Selling Out Higher-Education Policy? Led by Sallie Mae and the Apollo Group, the loan industry and for-profit colleges use political donations to try to get their way on Capitol Hill Jul. 30, 2004. |
Selling Out Higher-Education Policy? HTML link |
| The Dallas Morning News Dealing in diplomas For the University of Phoenix, college is a big business - and getting bigger Feb. 28, 2004. |
DallasMorningNews.040228 PDF file 62 KB |
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| The Law Office of Nancy G. Krop U.S. Department of Justice Files Amicus Brief in Support of Lawsuit Against University of Phoenix May 11, 2005. |
LONGK.Press.Release.050511 PDF file 44 KB |
