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Indiana joins suit against for-profit college company

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Indiana has filed a joint complaint in a whistleblower suit against Education Management Corp., which alleges the for-profit college company and two of its subsidiaries received more than $12 million in state financial aid after making false claims and misrepresentations to the state.

This is the first time Indiana Attorney General Greg Zoeller’s office has used a whistleblower lawsuit to seek civil penalties due to false claims paid out of state financial aid, rather than out of Medicaid.

The lawsuit was originally filed by private plaintiffs in U.S. District Court, Western District of Pennsylvania. It alleges that EDMC and subsidiaries violated a federal law that bans incentive compensation for college admissions employees based on the number of students they enroll. The companies are accused of violating Title IV of the Higher Education Act of 1965 by improperly compensating college recruiters with bonuses such as expensive vacations based on the number of students they recruited to enroll. The defendants of the Indiana portion of the suit are The Art Institute of Indianapolis and Brown Mackie College, which operates in five Indiana cities.

The Indiana portion of the complaint alleges a total of 16,814 student financial aid awards were claimed by the six EDMC schools operating here that falsely represented their compliance and eligibility to the state. The lawsuit says that EDMC defrauded the State of Indiana by claiming more than $12 million in student financial aid for which it was not eligible since 2003.

Indiana seeks civil penalties of at least $5,000 for each false claim submitted, treble damages, attorney fees, litigation costs and interest. A copy of the suit is available on the attorney general’s website. The state is demanding a jury trial.

The states of California, Florida, and Illinois, as well as the United States, also intervened in the suit.

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  1. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  2. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  3. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  4. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

  5. "No one is safe when the Legislature is in session."

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