Thursday, December 17, 2009
The University of Phoenix recently settled a False Claim Act qui tam action in California federal court.
The lawsuit alleged that the the University of Phoenix had defrauded the government by paying enrollment counselors for enrolling students, a practice prohibited for educational institutions that receive federal funds for student aid.
The case settled for $67.5 million to be paid to the government and $11 in attorneys fees. This is a big payday for plaintiffs lawyers pursuing qui tam actions. But it is a risky strategy -- this case is notable because it is unusual for plaintiffs to win these cases where the government chooses not to intervene.