Education Fraud
1. What would be an example of a False Claims Act case against a for profit post-secondary school educational institution?
There have been a significant number of cases, many of them successful, alleging the improper payment of commissions for recruiting students to enroll in a for profit colleges and universities, and to obtain federal student loans to pay for the tuition. Often the students do not finish their degree programs, and they end up saddled with student loans which they cannot repay. When the loans default, the Government suffers the losses.
2. What would be an example of a False Claims Act case against a for profit post-secondary school educational institution?
We have seen and handled Education Fraud cases where an organization that is supposed to provide after school tutoring falsifies enrollment and attendance records in order to fraudulently receive Government monies.
3. Is there anything to look for in particular in Education Fraud cases?
You need to make sure that Federal funds are involved. Usually, they are in the form of Federal student loans (e.g., Pell Grants, Stafford Loans) or so-called “Title I” money that is used to pay for ED programs. Of course that is only for Federal lawsuits. There can also be education fraud involving State and Local funds.
4. Who investigates allegations of Education Fraud?
With respect to Federal funds it is the Office of Inspector General (OIG) of the U.S. Department of Education. Sometimes State and Local funds are also involved in Education Fraud actions. In those cases the matters may be investigated jointly between the Federal authorities and State and Local investigators.
Bank Fraud
Bank Fraud
In addition to the False Claims Act, there are a number of laws which can be used to achieve successful whistleblower cases involving Bank Fraud. These include: 12 U.S.C. § 1831k (reward up to $100,000, for information leading to recoveries of FDIC funds) ; 12 U.S.C. § 1833a (FIRREA civil penalties); 12 U.S.C. § 4201 (Bank Fraud whistleblower law with limited qui tam provisions) and 18 U.S.C. § 1831j (banking agency employee whistleblower protection).
1. What areas of banking activity give rise to Bank Fraud whistleblower cases?
Currently, the most common activity underlying Bank Fraud whistleblower cases involves improper loan origination practices in Government insured loan programs where the Government ends up footing the bill on a large number of defaulted loans. This typically occurs where the lending bank has systemically failed to properly assess the borrower’s credit risk and/or accurately report the risk of default to the Government agency which will guarantee the loan’s repayment. Often the lending bank fails to follow its own loan origination guidelines as well as those of the applicable Government loan insurance program. Undisclosed or improper loan origination fees and brokerage commissions are also areas of concern in Bank Fraud cases.