BOSTON – The United States government has taken Study Across the Pond, LLC, and its founder John Borhaug to court, alleging a massive student aid scam that netted millions in federal funds.
The False Claims Act complaint filed in the District of Massachusetts accuses SATP and Borhaug of convincing foreign schools to enter into arrangements that violated the federal ban on incentive-based compensation for student recruitment.
According to court documents, SATP and Borhaug paid their employees to recruit American students to attend foreign schools in the United Kingdom, and then required the schools to pay a commission when recruited students enrolled in the UK schools.
The complaint alleges that based on this conduct, SATP and Borhaug knowingly caused UK schools to submit false claims to the U.S. Department of Education.
“Today’s complaint alleges that Study Across the Pond and John Borhaug used illegal incentives to influence American students to attend foreign schools,” said Acting United States Attorney Joshua S. Levy for the District of Massachusetts. “With today’s action, my office demonstrates its commitment to upholding the ban on incentive compensation, rooting out undue financial influence in student recruitment, and protecting the integrity of federal student financial aid programs.”
The Incentive Compensation Ban, a provision of Title IV of the Higher Education Act, prohibits institutions of higher education that receive federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based directly or indirectly on the recruiters’ success in securing student enrollments.
The complaint alleges that SATP knowingly collaborated with at least 28 UK schools to violate the Incentive Compensation Ban while the schools were participating in federal student aid programs.
“Third-party recruiters who demand illegal financial incentives for recruiting students to institutions of higher learning, no matter where those institutions are located, undermine the integrity of our system of higher education,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
Under the qui tam provisions of the False Claims Act, a private citizen can sue on behalf of the government and share in any recovery. The government also is entitled to intervene in the lawsuit, as it has done in this case.
The case is being prosecuted by Assistant U.S. Attorney Laura J. Kaplan of the District of Massachusetts.
The Office of Inspector General has a unique and special law enforcement mission – to protect public education funds for eligible students. Today’s announcement is an example of our commitment to this mission,” said Terry Harris, Special Agent in Charge of the U S. Department of Education Office of Inspector General’s Eastern Regional Office.
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Key Facts
- State: Massachusetts
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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