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Discovery to be Coordinated in Massive $11 Billion Whistleblower Suit

by Edward Kang and Michael Chiumento, Clerk

Discovery to be Coordinated in Massive $11 Billion Whistleblower Suit

Discovery should be coordinated in two qui tam cases filed against Education Management Corp., or EDMC, an education company…

U.S. District Judge Terrence McVerry of the Western District of Pennsylvania has ruled that discovery should be coordinated in two qui tam cases filed against Education Management Corp., or EDMC, an education company based out of Pittsburgh.  Two former recruiters of the massive campus manager which runs over 100 campuses nationwide allege that EDMC violated the Higher Education Act in using incentives to college recruiters based upon how many students they were able to draw.  Since the allegation, the federal government as well as a number of states have also joined the suit.  According to the allegations, the fraudulent activity cost the federal government upwards of $11 billion.  Furthermore, the second case, which is also assigned to Judge McVerry, involves the company’s collection of student-aid funding despite their knowledge that they did not possess the structure to be eligible for such funds, violating the False Claims Act.

The judge has ruled that, while the scope of the discovery for the two cases could be different, the cases could be coordinated as there are major overlaps in discovery between them pertaining to numerous statistics.  Both actions will continue as discovery is collected in an effort to prove the massive fraudulent claims against EDMC.

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