For-profit university settles Pell Grant fraud case

The United States University, a California based for-profit college,has agreed to a $686,720 civil settlement over federal financial aid fraud charges.

The school’s former financial aid director pleaded guilty to falsifying student records and could face up to a year of prison time, according to the local U.S. Attorney's office.

Between 2008 and 2011, Christina Miller filed falsified Pell Grant applications for students of United States University, a school with online and in-person programs.

Miller pleaded guilty to filing more than $300,000 worth of fraudulent Pell Grant applications on behalf of the school’s students, said Assistant U.S. Attorney Christopher Tenorio, who handled Miller's prosecution. The case was unusual for resulting in a civil case against the university as well as criminal charges.

“A lot of times if there is a indication that there are false applications for financial aid, it’s usually by an individual," Tenorio said. "And in this case, it was a financial aid director. There were many, many applications under her control and many false applications we suspect she made.”

Joseph Price, the assistant U.S. attorney who handled the civil case against the university, said there has likely been an uptick in these kind of cases of financial aid fraud with the proliferation of for-profit universities that has taken place in recent year.

The cases against the university and Miller were the result of a whistleblower suit filed by Veronica Glaser, a former student and employee of the university. Under the federal False Claims Act, Glaser could receive 15 percent to 25 percent of the university's settlement payment, according to Price.

According to its website, tuition at United States University ranges between $7,800 and $15,600 a year for a full-time student depending on the program. The school offers teacher credential, nursing and other programs. Its enrollment was 326 students during the 2009-10 school year, the most recent year for which enrollment information is available on the school's website.

University representatives have not yet responded to requests for comment.