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Univ. of Phoenix asks judge to dismiss FCA suit

The University of Phoenix, the nation’s largest vocational school chain, asked a federal judge in Sacramento, California, to dismiss a suit brought against it under the qui tam provisions of the False Claims Act. The suit alleges that the university violated federal rules by offering incentives to employees, including higher salaries and more benefits, based on the number of students they enrolled.

The university claims that it already paid $9.8 million to the U.S. Department of Education to settle allegations similar to those made in the lawsuit and that this constituted an “alternate remedy.” The government and the whistleblowers dispute this, saying that the Dept. of Education settlement explicitly stated that the Department did not have the authority to “waive, compromise, restrict or settle … any past, present or future violations” by the university of either criminal laws or any action initiated against the school for fraud under the False Claims Act.

These developments were reported in the June 26, 2007 issue of the Los Angeles Times. Earlier stories on this suit were posted here on September 8, 2006 and April 26, 2007.

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