Company to pay $7 million to resolve allegations

April 20, 2009 4:57:40 PM PDT
A Denver-based company and the colleges it operates in Texas have agreed to pay $7 million to resolve allegations that the colleges submitted false claims for federal student aid funds, the Justice Department announced Monday. The government alleged in a civil suit that the Texas schools operated by Alta Colleges Inc. obtained licensing from the Texas Workforce Commission by misrepresenting that they complied with job-placement reporting requirements and that their interior design programs met the standards for a professional license. State licensing is a requirement for receiving federal student aid.

Alta Colleges is the parent company of Westwood College, which operates 17 campuses in six states. The Texas campuses are located in Dallas, Fort Worth and Houston.

In a letter to the college's faculty and staff, Alta chief executive officer George Burnett said the company believes it has acted lawfully but felt it necessary to settle with the government because of the time and expense associated with litigation. An Alta spokesman said the company would have no other comment.

The government's lawsuit included the allegation that Alta Colleges violated TWC requirements by falsely representing that more than 90 percent of its students received jobs after graduation. In truth, the figure was 54 percent, and only a third of the graduates were placed in jobs through the efforts of the school, according to the suit.

When it sued the company, the government intervened in a federal whistleblower suit. The plaintiffs who initiated the proceeding -- all former employees of the college -- will receive $1.9 million as part of the settlement, the government said.

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