This sure sounds pretty sleazy, in addition to being illegal. And, it's your tax dollars at work:
The U.S. Justice Department, 11 states and the District of Columbia are backing an employee whistleblower lawsuit against Education Management Corp. (EDMC), a company once run by former Maine Governor John McKernan. McKernan continues to serve as Chairman of the Board of Directors. He also is the husband of Senator Olympia Snowe (R - Maine).If this proves to be true, I sure hope DOJ is going to get the money back -- even if that means suing McKernan and his wife for all of their assets. Instead, he'll probably get a pardon.
The complaint alleges that the for-profit college chain was illegally paying recruiters based on the number of students they could sign up. EDMC allegedly based recruiter salaries on their sales abilities and also gave recruiters prizes, including expensive trips, based on their ability to bring students in. Federal law bans for-profit colleges that accept federal aid from compensating employees based on their ability to recruit students. Harry Litman, an attorney for the two former employees who are serving as whistleblowers in this case, said EDMC's violations were obvious.
"It did it flagrantly," Litman said. "It did it for many years. It lied to the federal government about it. And [employee incentives] fueled their explosive growth to $2.5 billion a year, almost all of which is taxpayer money."
