Consumer Fraud

Whistleblower Alleges Charlotte Law College Cheated Taxpayers

IRS tax law whistleblower Flickr 315x210 Whistleblower Alleges Charlotte Law College Cheated TaxpayersA whistleblower lawsuit filed by a former professor of the Charlotte School of Law accuses the now-defunct for-profit school and its parent company Infilaw of cheating taxpayers out of $285 million by routinely admitting hundreds of unqualified students and then manipulating their records to ensure their federal loan money for tuition kept flowing.

According to The Charlotte Observer, whistleblower Barbara Bernier filed the False Claims Act lawsuit in June 2016 on behalf of the U.S. government, accusing Charlotte Law of much of the same illegal maneuvering that other for-profit schools have been accused of in recent years, thanks to whistleblower actions.

The whistleblower lawsuit remained under seal, giving federal prosecutors time to investigate the claims and decide whether to become an active party in its litigation.

Ms.  Bernier says the for-profit school, which closed Aug. 24 after federal loans stopped, engaged in schemes to inflate student enrollment and maximize profits. She alleges that Charlotte Law, once the largest law school in North Carolina, lowered its student admissions and retention standards and exaggerated the state bar exam scores of its graduates and graduate job-placement rates.

“Much of her complaint focuses on the steps school leaders took in 2008 to increase and maintain the flow of students despite a recession that slashed both legal jobs and law school applications. Admissions office employees were given quotas of students they had to accept to keep their jobs,” the suit says, according to The Charlotte Observer.

Ms. Bernier alleges that 1,355 substandard students were enrolled in Charlotte Law over a six-year period starting in 2010. Based on public records and statistics, she contends, these enrollments resulted in $285 million in improper payments from the federal government to the school.

“The goal of the school has never been focused on education,” Ms. Bernier’s lawyer told The Charlotte Observer. “The shareholder tended to be more important than the student body, and that’s why she came forward.”