University of Phoenix Gets an “F” for Fraud Allegations that now stand

The Ninth Circuit Court of Appeals in San Francisco, California reinstated a federal qui tam case filed by two former employees of the University of Phoenix alleging that the school enrolled unqualified students to get federal funding. Recruiters were rewarded based on the number of students they enrolled.  The lower court had previously dismissed the suit stating that the False Claims Act did not cover such conduct. Of note was the fact that the United States Department of Justice filed an amicus brief stating that the ruling by the district court “could impair enforcement of the False Claims Act ”.  While a federal appeals court in New Orleans had previously dismissed three cases that were similar to the University of Phoenix case, a Chicago federal court of appeals ruled consistently with the Ninth Circuit.

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