Federal False Claims Act and Tennessee Schools

Tennessee educational lawyers providing protection for whistleblowers who disclose improper conduct in Nashville, Chattanooga, Memphis, and Jackson

The federal False Claims Act allows anyone the right to disclose fraud against the government in the education arena. This includes the right to disclose when schools make false assertions in order to entice students to enroll—often seen at the university level, including “online schools.” Educators and anyone with knowledge of the fraud who successfully bring a claim under the False Claims Act may be entitled to a percentage of any recovery.

At Gilbert McWherter Scott Bobbitt PLC, we understand how important it is for honesty in education. Schools set an example for the community and for their students. When schools cheat, the public suffers financially and socially. Our Tennessee school False Claims Act attorneys have a strong record of helping families, children, educators, and others make sure the school system obeys state and federal laws. Among other issues, we protect the rights of those who bring whistleblower claims.

The False Claims Act

The federal False Claims Act allows whistleblower claims when any person or entity presents a false or fraudulent claim to the US government or a government agency for payment. Prohibited acts include:

  • Knowingly making a false claim for payment
  • Falsifying records to get a claim approved
  • Knowingly making a statement to reduce or avoid having to make payment to the government
  • Other dishonest acts set forth in the statute

Whistleblower laws reward whistleblowers that successfully expose fraud. Whistleblower laws, such as the False Claims Act, also protect whistleblowers against retaliation actions.

Remedies when schools make false claims

A new area of whistleblower law is being asserted against for-profit schools and universities who pay recruiters based on the number of students the recruiters enroll. The problems with overaggressive recruiting may include:

  • Dishonest claims. Recruiters are encouraged to get as many students into the school without regard for the ability of the student to graduate or enter the workforce after graduation. Dishonest claims include assertions about job placement rates after graduation and starting salaries. There are also claims about the ability to transfer credits from previous schools that turn out to be false. Additional claims of dishonesty a Tennessee school False Claims Act lawyer investigates may include:
    • Charges the school failed to provide a quality education
    • Violations of state rules and the bylaws of accrediting bodies
    • Grade inflation
  • Damage to the government. Large amounts of money are involved because students often obtain federally insured loans and grants to go to these schools. When the graduates do not obtain expected employment promised by recruiters after graduation, they default on loans, costing the government a fortune.
  • Student harm. Many students will live with a lifetime of debt because student loans generally cannot be discharged in bankruptcy. Many graduates of for-profit schools and universities are now bringing claims under the False Claims Act for misrepresentation and seeking tuition reimbursement.

Every institution that uses any form of federal student loans or student grants must also sign a Program Participation Agreement, PPA, with the United States Department of Education. By signing the PPA, the educational institution agrees that it is meeting the Title IV requirements of the Higher Education Act. It is the signing of the PPA, which is the “false” claim that whistleblower lawyers assert under the False Claims Act. Court rulings have been divided as to whether the signing of the PPA is enough to bring a valid claim.

Whistleblower awards

The person, known as a relator, who brings the whistleblower action under the False Claims Act is entitled to a percentage of the recovery. The odds of winning the claim are better if the government intervenes. The awards tend to be slightly higher when the government does not intervene because the case is then harder to win. Defendants may be required to pay triple the amount of the false claim and penalties under the False Claims Act. The awards and penalties may differ for other whistleblower statutes.

Tennessee attorneys offering strong counsel for individuals who bring claims under the False Claims Act

The Gilbert Firm fights for any individual who takes a stand when schools cheat or misrepresent their services. To review your case with an experienced Tennessee school False Claims Act lawyer, please call 888.354.FIRM (3476) or complete our contact form. We help residents of Nashville, Chattanooga, Memphis, Jackson, and across Tennessee get advice and protection when they discover school-related fraud.