South Carolina University to Pay $2.5M under False Claims Act for Allegedly Violating Incentive Compensation Ban

Staff Report From South Carolina CEO

Tuesday, February 12th, 2019

North Greenville University, based in Greenville, South Carolina, has agreed to pay $2.5 million to resolve allegations that it violated the federal False Claims Act by paying referral fees for the recruitment of students whose education was paid for through federal government loans.

A settlement agreement reached between the United States government and NGU, pursuant to a whistleblower claim by the law firm of Guttman, Buschner & Brooks ("GBB"), described the covered conduct as follows:

NGU paid commissions, bonuses and/or incentive payments to a college recruiting firm, in which NGU holds a 33% ownership and control over its Board of Directors. This contingent fee of 50% of the gross tuition collected for each student recruited by the firm was not disclosed to its students, 95% of whom receive Title IV financial aid from the U.S. Government. As a condition of eligibility and payment of funds under Title IV programs, schools are precluded from paying referral or contingency fees to recruit students and from entering into tuition-sharing agreements.

The case is U.S. ex rel. Shoe v. North Greenville University et al. Whistleblower Maurice Shoe is represented by Guttman, Buschner & Brooks PLLC, Bienert Katzman PLC, and Richard Harpootlian P.A.

The GBB team included Traci Buschner, Reuben Guttman, Justin Brooks, and Liz Shofner.

In a statement, GBB partner Justin Brooks said "Schools that operate as recruitment mills not only violate federal law but also violate the trust placed in them by their students – including working parents and veterans – all at taxpayer expense. This was an important case and we feel honored to have played a part in its resolution."

Guttman, Buschner & Brooks PLLC is a boutique firm with a diverse group of attorneys, including a former Congressman, a former Commissioner of the OSHA Review Commission, a law professor who is a national expert on complex litigation and trial practice, a former attorney with the FDA and the EPA who also holds a medical license and continues to practice, and former federal law clerks and prosecutors.

The firm has recovered nearly $6 billion dollars for state and federal offices in Washington, D.C., Pennsylvania, and Delaware. Recent recoveries include a $280 million recovery in a non-intervened case against Celgene Corporation (U.S. ex rel. Brown v. Celgene) and a settlement against Humana Inc. achieved on the brink of trial (U.S. Graves ex rel. Humana). In addition to the recent Celgene and Humana litigations, attorneys at the firm represented the lead whistleblower in U.S. ex rel. McCoyd v. Abbott Labs, which involved the recovery of $1.6 billion for the government; one of several whistleblowers bringing FCA cases against GlaxoSmithKline in 2012, which resulted in the recovery of $1.04 billion (U.S. ex rel. Graydon v. GSK);  one of the whistleblowers bringing FCA cases against Pfizer which resulted in the recovery of $2.3 billion (U.S. ex rel. DeMott v. Pfizer); the lead whistleblowers in U.S. ex rel. Sandler and Paris v. Pfizer, which resulted in recovery of $257.4 million; the lead whistleblower in U.S. ex rel. Szymoniak v. Bank of America, which resulted in the recovery of $95 million; three of the whistleblowers FCA cases against a large hospital chain (U.S. ex rel. Doghramji v. CHS), which resulted in the recovery of $98 million; the lead whistleblower in U.S. ex rel.  Kurnik v. Amgen, which resulted in the aggregate recovery of $30 million from Amgen, Inc., Omnicare, and PharMerica Corp.; and the whistleblower in U.S. ex rel. Abrahamsen v. Hudson Valley, which resulted in a recovery of $5.5 million to the federal government and state government.