If you watch a lot of daytime TV, you may have seen lots of ads by for-profit schools. The pitches promise you an awesome job, a lot of pay, more sex-appeal, and even, in some cases, super-human powers.
But did you ever think about the people whose job it is to get you to pony up the fees that put the profit in for-profit? Do you know what they have to go through? The multi-point reviews of their performance? On things like drop-out rates, attitude, team-playerness, professional development, and appearance? Did we mention attitude?
Guess what — none of that mattered. Only getting the students to do something that paid a fee in fact counted when it came time to put money in your pay packet each month.
A woman who did the job over the course of a decade sued ITT Educational Services under the False Claims Act. She alleged that ITT scammed the feds out of some of the $150 billion that goes to helping people afford higher (post-high school) education. The district court dismissed the case on the ground that an earlier lawsuit (Graves) had alleged pretty much the same thing. Because the FCA bars suits where someone else already made “public disclosure” of the underlying facts, the court ruled, it had no jurisdiction to hear the suit.
The Seventh Circuit reversed. It held that Debra Leveski based her FCA claim not on the old way ITT did things — a way that more or less paid bounties on sales — but on the new way — which hid the bounties behind a fake evaluation system–and on activities in a separate department, financial aid. That made Ms. Leveski’s claim different enough to avoid the public disclosure bar of the FCA in 31 U.S.C. § 3730(e)(4)(A). As the Court explained with a bit more detail:
Leveski’s case appears to be substantial, not frivolous. Even disregarding the fact that Leveski’s allegations cover a later time period than the Graves allegations, Leveski has still provided the district court with at least two ways in which her allegations substantially differ from the Graves allegations: (1) Graves alleged an outright scheme to violate the HEA incentive compensation ban, in which ITT did not even attempt to feign compliance, and (2) Graves was solely concerned with the ITT recruitment office and had nothing to say about the ITT financial aid office. Moreover, through her affidavit and deposition testimony, Leveski has provided the district court with numerous pieces of evidence both supporting her allegations and demonstrating that her knowledge is direct and independent.
Leveski v. ITT Ed. Svcs., Inc., No. 12-1369 (7th Cir. July 8, 2013).