Kaplan College - False Claims Act Lawsuit

False Claims Act Lawsuit

In 2008, three former academic officers at Kaplan University have filed a wide-ranging federal lawsuit that accuses the for-profit institution of defrauding the U.S. government out of more than $4-billion.

The lawsuit alleges that Kaplan enrolled unqualified students, inflated their grades so they could stay enrolled, and falsified documents to obtain accreditation for certain academic programs. The suit was filed in U.S. District Court in Tampa, Florida.

In further developments in the case, the three former employees who have accused Kaplan University in federal court of obtaining federal student-aid funds under false pretenses received a subsequent boost from the U.S. government. It came in the form of a court filing by the U.S. Department of Justice, opposing Kaplan’s attempt to have the False Claims Act lawsuit against it dismissed.

Although the federal government has declined to intervene in the case, the Justice Department said in its filing that Kaplan’s legal arguments for dismissing the case were off point. Further, the Justice Department maintained, the “parade of horribles” that Kaplan predicted if the case were not dismissed was “entirely illusory.” The government contended it is entitled to a portion of the proceeds if the employees prevail against the company.

The U.S. Department of Justice's involvement in the case echoes the stance it took in 2005, after a False Claims Act lawsuit against the for-profit University of Phoenix was initially dismissed. That case was later reinstated by a higher court and is slated for trial next year.

Kaplan University denied any wrongdoing. The institution is an arm of Kaplan Inc., a wholly owned subsidiary of the Washington Post Company.