EDMC seeks dismissal of massive federal lawsuit

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Downtown-based for-profit educator Education Management Corp., or EDMC, filed a motion today to dismiss the multi-billion-dollar federal False Claims Act lawsuit against it, claiming that its accusers have changed their tune over time.

The motion seeks to end a lawsuit launched in 2007 by Lynntoya Washington and Michael T. Mahoney, two former employees of EDMC, and joined by the U.S. Justice Department in 2011. The two individuals and the government allege that EDMC based recruiter salary adjustments solely on the number of new students they enrolled, in violation of a federal law designed to reduce the number of misplaced students receiving aid.

EDMC in recent weeks successfully fought to unseal the two former employees' earliest filings, which were not previously public.

According to EDMC, for four years Ms. Washington, later joined by Mr. Mahoney, admitted in court filings "that non-enrollment factors were considered in EDMC's compensation process," the education firm wrote in its motion. Then in 2011 the case "changed dramatically," according to EDMC, when the plaintiffs realized that the law allowed enrollments to be a factor -- though not the sole factor -- in awarding raises.

Then, according to EDMC, the complaint shifted to allege that EDMC's pay plan "as implemented" rewarded only enrollment totals, even though the plan as written included other factors.

EDMC also this week filed court briefs claiming that a statistical analysis of around 15,000 pay decisions proved that enrollments weren't the basis of recruiter pay raises.

EDMC has argued that it based recruiter raises not just on new student enrollments, but on job knowledge, business practices, ethics, professionalism, customer service, initiative, seniority, location and administrative responsibility.

The government has alleged that EDMC institutions got $11 billion in federal student aid since 2003, which it claims was paid in part based on the assurance that the recruiter compensation plan was compliant with the law.

Rich Lord: rlord@post-gazette.com or 412-263-1542. Twitter: @richelord.

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