Owner of Vocational College Chain Indicted, Sued for Alleged Fraud

FAFSA_screenshot_using_camera.jpgFederal prosecutors indicted the owner of a now-closed chain of colleges for conspiracy to defraud the federal government and theft of government property. United States v. Amor, et al (“Amor I“), No. 1:14-cr-20750, indictment (S.D. Fla., Sep. 30, 2014). The government alleges that the defendants operated the schools primarily as a means of defrauding federal student aid programs, rather than educating students and preparing them for careers. The principal owner also faces a civil lawsuit under the False Claims Act (FCA), originally filed by a former admissions employee and now joined by the government and the state of Florida. United States ex rel Peña v. Amor, et al (“Amor II“), No. 1:12-cv-21431, complaint in intervention (S.D. Fla., Dec. 2, 2014).

The defendants operated FastTrain College, a for-profit college with seven campuses in the state of Florida. According to the indictment, it “awarded career diplomas and industry certifications” in various medical and computer fields. Amor I at 1. The school received approval from the U.S. Department of Education (DOE) to receive loans from the Federal Direct Loan Program and grants from the Federal Pell Grant Program. Both programs are administered by the DOE’s Office of Federal Student Aid. To receive either type of financial aid, students complete the Free Application for Federal Student Aid (FAFSA).

The federal government alleges that the defendants recruited students who did not have high school diplomas or GEDs, and therefore did not meet the qualifications for federal student aid, to enroll in the school. Efforts to attract students allegedly included hiring exotic dancers as recruiters. In some cases, the government claims, the defendants falsely represented that prospective students could “obtain a high school diploma for a fee.” Id. at 8. They allegedly caused about 1,300 students to submit FAFSAs falsely stating that they had graduated high school. This allegedly resulted in the receipt of more than $6.5 million in Direct Loans and Pell Grants.

The indictment charges the defendants with one count of conspiracy to defraud the United States, 18 U.S.C. § 371; and 14 counts of theft of government property, 18 U.S.C. § 641. Each of these counts identifies specific loan amounts received by individual students, with names redacted, during a period from October 2010 through May 2012. The schools reportedly closed the following month after a raid by federal investigators. The government is also seeking civil forfeiture of property allegedly obtained with stolen funds, including multiple pieces of real property, several sports cars, a boat, a yacht, and an airplane. Amor I at 17-18, 18 U.S.C. § 981(a)(1)(C).

In a civil lawsuit, a former admissions employee acted as a whistleblower by suing the school and its owner under federal and state FCAs, 31 U.S.C. § 3729 et seq., Fla. Stat. § 68.081 et seq. The plaintiff, known in FCA lawsuits as the “relator,” claims that he was hired as an admissions officer in 2010 despite “having no prior college admissions experience.” Amor II at 6. He claims to have personal knowledge of fraudulent schemes to submit false applications for federal and state student aid. The federal and state governments intervened in the suit in late 2014.

Criminal defense attorney Michael J. Brown has represented people in west Texas state and federal criminal cases for more than two decades. To schedule a confidential consultation with a knowledgeable and experienced defense advocate, contact us today online or at (432) 687-5157.

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Owner of Company that Allegedly Trains Customers to Pass Polygraph Tests Charged with Fraud, Witness Tampering, Texas Criminal Lawyer Blog, February 25, 2015
Commodities Trader Charged in First Federal Case to Allege Use of High-Frequency Trading to Manipulate Market, Texas Criminal Lawyer Blog, February 19, 2015
Theft and Misuse of Computer Data Are Becoming Major Areas of Cybercrime Prosecutions, Texas Criminal Lawyer Blog, December 17, 2014
Photo credit: By U. S. Federal government [Public domain], via Wikimedia Commons.