False Claims Act Lawsuit
In 2008 three former academic officers at Kaplan University, an arm of Kaplan, Inc., filed a federal whistleblower lawsuit that accused the institution of violating the False Claims Act and defrauding the U.S. government out of more than $4 billion. The lawsuit alleged 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 and unsealed in 2008.
The federal government declined to intervene in the case, but on May 29, 2008, filed a "statement of interest" brief opposing a Kaplan attempt to have the lawsuit dismissed. On July 6, 2010, the federal government filed a "statement of interest" brief to advise the court of its position on certain legal doctrines relevant to the case. (July 6, 2010 Statement of Interest.) In the summer of 2010, The Chronicle of Higher Education reported that the U.S. Department of Justice had filed another "statement of interest" against dismissing the purported whistle-blowers' claims. In a memorandum filed by the U.S. Department of Justice, Judge Patricia A. Seitz of the U.S. District Court in Miami was urged to permit the lawsuits against Kaplan to proceed, stating that the "parade of horribles" that Kaplan predicted if the case were not dismissed was "entirely illusory.".
On August 17, 2011, Seitz dismissed with prejudice these allegations, finding that the former employees involved in the case had failed to sufficiently allege any violation of the False Claims Act. Seitz declined at this time to dismiss claims brought by two of the former employees under the accommodation provisions of the Rehabilitation Act and federal employment law, respectively. Kaplan University has denied any wrongdoing in the case.
Read more about this topic: Kaplan, Inc., Lawsuits
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