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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, September 14, 2017

NY Times: More On The Feds' Criminal Investigation Of Charlotte Law School

Charlotte Logo (2016)New York Times, Federal Inquiry of Charlotte Law School Is Disclosed by Suit:

Barbara Bernier arrived at Charlotte School of Law four years ago to teach constitutional and other law courses.

But what she found at the for-profit law school was different from her prior teaching experiences, so she quit her tenured post in August 2016. A few months earlier, she had filed a federal claim that the school and its owner, the InfiLaw Corporation, defrauded taxpayers of $285 million over a five-year period.

The whistle-blower lawsuit — which had been kept sealed under the federal False Claims Act — came to light in recent weeks, along with the disclosure that it had prompted a federal investigation. The fraud practices alleged in the lawsuit include evading federal requirements that for-profit schools receive at least 10 percent of revenue from sources other than federal student loans.

Details of that and other practices, including providing stipends to at-risk students to delay taking the state bar exam, were cited in Ms. Bernier’s lawsuit. ...

Despite the decision by federal prosecutors not to intervene, Ms. Bernier will continue her federal claim, hoping to refund hundreds of millions of dollars to the government as well as collect a percentage of any amount awarded. ...

According to Ms. Bernier, school officials shored up student numbers and performance metrics through unusual means. The Charlotte Law dean’s office, she said in her legal papers, “telephoned graduates the night before the bar exam to actively discourage them from taking the exam the next day.”

The reason for the last-minute calls and the offer of a $5,000 stipend was to reduce the number of first-time bar exam takers who might fail it, she explained in a telephone interview.

Last January — after Ms. Bernier’s suit had been filed — Charlotte’s local public radio station, WFAE, broadcast recordings of a Charlotte Law school dean describing paying at-risk students to delay taking the bar and enroll in a bar preparation course. In the recordings, a dean noted that without deferring 21 students for the July 2015 exam, the pass rate “would have likely been 20-something percent.”

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/09/ny-times-more-on-the-feds-criminal-investigation-of-charlotte-law-school.html

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