Devry University accused of violating federal laws

A lawsuit filed this month in San Diego, Calif. alleges DeVry University Inc. leadership in the city bribed students and sought ways to work around federal laws meant to regulate for-profit colleges.

Attorneys for Karinna Topete, a former manager at DeVry in California, claim she witnessed school officials violating internal company policies, as well as state and federal laws and regulations and that she was a victim of sexual harassment.

The lawsuit argues the DeVry campus' leadership would issue bonuses to admissions counselors who exceeded enrollment quotas, and that officials would "bribe" students -- in one instance, providing gift cards -- in exchange for positive performance reviews from students, according to court documents.

For-profit colleges have been increasingly regulated by the Obama administration in an attempt to reform the "bad actors."

 Recent investigations by the U.S. Senate and Government Accountability Office found widespread deceptive recruiting practices by many of the largest for-profit schools. In 2012, Sen. Tom Harkin (D-Iowa) listed DeVry along with other schools as companies that had "very serious shortcomings in the past" but are making improvements.

Topete alleges DeVry officials sought to evade federal regulations by sending admissions employees to community college transfer fairs to pressure enrolled students to sign up for classes at the for-profit institute. She also claims in the lawsuit that the DeVry Director of Admissions ordered her not to provide "informational materials or referrals to persons of Iraqi national origin or Middle-Eastern appearance."

According to the U.S. Department of Education, DeVry received just shy of $1.3 billion in taxpayer dollars through federal student aid in 2010-11, the most recent year data is available.