EDMC's insurer reveals new lawsuits against education giant

An insurer covering Downtown-based Education Management Corp. filed a complaint in federal court today seeking an order absolving it of covering losses in False Claims Act lawsuits against the for-profit college system, and revealing the existence of two still-sealed cases.

The American Insurance Co. noted two already public lawsuits, including one in which the U.S. Department of Justice has joined two former employees, alleging that EDMC made false claims against various governments.

“Two additional ... actions have been filed against EDMC for violations of the FCA” under seal, American Insurance's complaint indicates, adding that one is in the Western District of Pennsylvania and the other in the Middle District of Tennessee. American Insurance has redacted copies of those complaints, according to its filing, and they “assert violations of the FCA in connection with obtaining federal student aid funding that are comparable” to the already public cases.

An EDMC spokesman could not be immediately reached for comment.

Last month, U.S. District Judge Terrence F. McVerry rejected EDMC's efforts to dismiss part of one of the public complaints, brought by former employees Lynntoya Washington and Michael T. Mahoney.

They were joined by the federal government and five states in claiming that EDMC based recruiter raises solely on the number of new students they enrolled, in violation of a federal law designed to reduce the number of misplaced students receiving aid, and implicating $11 billion in federal payments. EDMC has countered that enrollments were one of numerous factors influencing recruiter pay.

Rich Lord: rlord@post-gazette.com or 412-263-1542. Twitter: @richelord.

First Published July 18, 2014 12:00 AM

Read more: http://www.post-gazette.com/local/city/2014/07/18/EDMC-s-insurer-reveals-new-lawsuits-against-education-giant/stories/201407180191#ixzz37yKhsKtj

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Employee fired at EDMC for documenting repeated class cramming (putting more students in a class than could fit in the physical classroom space). Putting more students in a class than its capacity is a direct violation of the institution's accrediting body. Senior management aware of documented class cramming and over capacity issues for multiple years. Employee attempted to document the problem, asked repeatedly for senior management to correct the problem, reported the class cramming issue to senior management, and was fired for doing so.

Was that just the staff or does it apply to us students too? I am a student and I may want to let my classmates know what is going on and what the latest news is and how it may affect us in the future, is that OK? I don't want to get expelled if you know what I mean.

That sounds like another law suit...or hand cuff time!

There was recently new required-by-July-or-be-fired training for faculty and staff that scarily detailed the legal criminal and punitive repercussions of breathing a word about anything to do with EDMC while employed or after employment for the rest of your life and even after that :-) You could make allegations and tell stories but Halperin would want some documentation I think for any complaint to be credible.

Will any workers come out against EDMC and blow the whistle on recruitment and marketing? David Halperin writes about this frequently at the Huffington Post. His email is davidhalperindc@gmail.com

I think its time they sell this company and let it start all over again from honest people who have the students best interest in mind. Its the only way to earn trust and respect.

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EDMC's insurer reveals new lawsuits against education giant

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