The federal government and the state of Florida have filed a civil complaint under the False Claims Act, intervening in a relator’s case against FastTrain College (“FastTrain”). The now defunct Miami-based for profit chain of schools allegedly submitted fraudulent documents to the U.S. Department of Education on behalf of students in order to gain access to federal financial aid programs. The conduct allegedly occurred from at least January 1, 2009 through June 22, 2012 when the schools were closed. Over this period, the school and its students received $4.34 million in student loans and $2.2 million in federal Pell Grants. In October, the school, its owner, and three other employees were charged in a 15-count indictment for conspiring to steal government money.
FastTrain was a privately owned, for-profit college with seven locations that provided vocational training in allied health programs and information technology programs. The schools’ corporate team was responsible for setting overall goals and strategies, and overseeing the operations at each of FastTrain’s campuses. FastTrain also employed an admissions director, an associate admissions director, and several admissions representatives and financial aid employees. The relator, Juan Peña, began employment with FastTrain as an admissions representative in 2010. Peña was eventually promoted to assistant director of admissions at one of the school’s campuses. In May 2011, Peña was promoted again to the role of director of admissions at another campus. According to Peña, FastTrain implemented a corporate strategy focused on increased admissions and profits above all else, putting intense pressure on admissions representatives like Peña to enroll as many students as possible.
To achieve its goals, FastTrain admissions representatives would routinely recruit new students on the streets and in the malls of Florida’s inner cities where the school’s campuses were located. FastTrain employees then allegedly engaged in a number of fraudulent schemes connected to the receipt of federal funds. Admissions representatives would coach prospective students to lie to FastTrain financial aid representatives when completing the Free Application for Federal Student Aid (“FASFA”) applications. For example, public school officials have determined that 403 FastTrain students whose FASFA stated that they graduated from a Miami- Dade County, Florida public school, did not do so. In addition to these lies, FastTrain also regularly engaged in falsifying high school diplomas. For example, students recruited by one admissions representative were told that to receive a high school diploma, they would have to pay the FastTrain representative $200.00 or $300.00. A high school diploma exam administered by “American Worldwide Academy” (“AWA”) was then completed by the employee on behalf of the student in exchange for a fee. With respect to 79 students that FastTrain reported as having a diploma from AWA, officials of that entity, indicated 69 of the 79 students never received diplomas or graduated, much less attended there. These students were allegedly lured to FastTrain with promises of free education.
Title IV of the Higher Education Act authorizes programs administered by the Department of Education that provide students with financial aid in the form of, among other things, Federal Pell Grants, Federal Direct Loans, and formerly, loans guaranteed by the Federal Government. In order to be eligible to receive federal funding under Title IV, FastTrain was required to adhere to a variety of regulations related to its operations. Federal law requires that a prospective student have a valid high school diploma or its recognized equivalent. Federal law also states that only a student maintaining satisfactory academic progress in his or her course of study according to the school’s published standards, and in accordance with federal guidelines, is eligible to receive financial assistance. FastTrain entered into contractual agreements with the Department of Education called Program Participation Agreements (“PPAs”), in which FastTrain specifically agreed to abide by these regulations. Execution of these PPAs with the was a condition precedent to its eligibility to receive federal funding under Title IV. Each time that it drew down federal grant monies, FastTrain certified that the funds were being expended in accordance with the conditions of the applicable PPAs.
Consequently, every request for a federal grant or Federal Direct Loan or federally guaranteed loan made on behalf of a student at FastTrain’s campuses constitutes a separate false claim. The United States allegedly sustained damages for over $4,340,000 in student loans and damages of $2,212,904 in connection with Pell Grants. FastTrain students also allegedly fraudulently received in excess of $15,000.00 in state funds in violation of the Florida False Claims Act.