Whistleblowers Accuse ATI Enterprises Schools of False Claims Act Violations
The U.S. government has intervened in a whistleblower lawsuit against ATI Enterprises Inc. (ATI), a private, for-profit chain of schools headquartered in the Dallas area. ATI operates career training schools in Texas, Oklahoma, New Mexico, and Florida under the names ATI Technical Training Center, ATI Career Training, and ATI Career Training Center.
ATI Allegedly Misrepresented Statistics to Lure Students and Claim Federal Aid Money.
The lawsuit alleges that between 2007 and 2010 ATI deliberately misrepresented to the Texas Workforce Commission the school's job placement statistics for three of its campuses in the Dallas area. The misrepresentations were allegedly meant to protect ATI's state licensure and, consequently, the school's eligibility for federal financial aid. In 2011, after a third-party audit of ATI's job placement statistics, the Texas Workforce Commission revoked the licenses for a number of ATI’s programs at the three Dallas-area campuses, according to the Justice Department.
ATI is also alleged to have knowingly enrolled ineligible students — students who did not have valid high school diplomas or their equivalent or who were enrolled under falsified diplomas. ATI kept students in its programs even when they should have been dropped for low grades or poor attendance. In addition, ATI employees allegedly made significant, deliberate misrepresentations to students about their future employment potential, such as:
- Telling its students that a criminal record was not an impediment to getting jobs in their desired fields of study,
- Quoting prospective salaries that were higher than its students were ever likely to earn, and
- Reporting inflated job placement statistics to both the Texas Workplace Commission and the students at ATI's campuses.
The alleged purpose behind these apparent misrepresentations were to entice students to enroll and so increase the school’s own receipt of federal dollars. While ATI stood to make more money, its students incurred debts and student loans too often went unpaid. ATI was putting its own interests far ahead of the interests of its students.
If proven, the case against ATI amounts to education fraud, a violation of the False Claims Act. If a defendant knowingly submits false claims, the government is entitled to three times the damages that resulted and a penalty ranging from $5,500 to $11,000 per claim.
Former ATI Employees Filed Whistleblower Suit Alleging Education Fraud.
The original whistleblower suit was filed under the qui tam provisions of the False Claims Act by a group of former ATI employees from the school's various Texas campuses. The qui tam provisions of the False Claims Act allow individuals to file a lawsuit on behalf of the government to address fraud against the government.
Once the whistleblower lawsuit is filed, the government has the opportunity to investigate the allegations and decide whether to intervene in the case and take the lead in the litigation. If the government does not intervene, the whistleblowers can proceed on their own. In either event, the whistleblowers are entitled to share in a portion of the recovery, if any.