ATI Enterprises Settles Student Financial Aid Fraud Claims for $3.7M

ATI Enterprises, a Texas-based chain of career training schools operating in the southern and western United States, has agreed to pay the U.S. government $3.7 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to federal student aid programs, the U.S. Department of Justice announced last month.  ATI Enterprises allegedly falsely certified compliance with federal student aid programs’ eligibility requirements and submitted claims for ineligible students.

To participate in federal student aid programs, schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms.   For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements.   The government alleged that, by misrepresenting its job placement statistics in order to maintain state licensure and accreditation, ATI Enterprises fraudulently maintained its eligibility for federal financial aid.

The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools.  This falsely increased the schools’ enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.

The lawsuits were originally filed by several former employees of ATI Enterprises under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Their share of the settlement has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.