• Sunday, February 19, 2012
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Another Whistle-Blower Sounds Charges Against Kaplan's Higher-Education Division

Kaplan Higher Education, the fast-growing college division of the Washington Post Company, is facing another lawsuit by a former employee who accuses the organization of unlawfully benefiting from hundreds of millions of dollars in federal student-aid funds. The lawsuit is tied to the way Kaplan compensated its student recruiters.

The company says the allegations are unfounded.

In his suit, a former admissions director from Milwaukee, Jorge Torres, accuses Kaplan of giving admissions recruiters free trips as bonuses, in violation of federal rules that bar paying incentive compensation for recruiting. The suits says recruiters were given trips to Puerto Rico in 2006 and to Maui, Hawaii, in 2007.

In a motion seeking to have the lawsuit dismissed, Kaplan said its recruiting practices followed rules of the U.S. Department of Education. It also argued the case should be dismissed because it repeats charges already raised in a previously filed lawsuit, and that to allow this second case to proceed would “invite parasitic” lawsuits.

In “whistle-blower” lawsuits like these, filed under the False Claims Act, the government would share in any judgments awarded if the company were found to have obtained federal funds under false pretenses. Although the U.S. Department of Justice declined to join either lawsuit, it has argued that the first case against Kaplan should go forward.

According to recent filings by the Washington Post Company, the higher-education division of Kaplan Inc. reported revenues of more than $593-million for the first six months of 2008 — an increase of 21 percent over the same period in 2007. —Goldie Blumenstyk