Skip to content
Subscriber Only

U.S. Joins Whistleblower Suit Against Education Management

The U.S. Justice Department joined an employee whistleblower suit against Education Management Corp., intervening for the first time in the student recruitment practices at for-profit colleges.

The suit alleges that Pittsburgh-based Education Management, 40 percent owned by Goldman Sachs Group Inc. funds, illegally paid recruiters based on the number of students they enrolled, the company said in a Securities and Exchange Commission filing today. The government, in most cases, forbids such incentive compensation for colleges accepting federal aid because of concern the practice will encourage companies to enroll unqualified students.