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Federal government sues college with campuses in Utah, Idaho

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Posted at 10:28 PM, May 08, 2014
and last updated 2014-05-12 16:21:43-04

SALT LAKE CITY -- The federal government is suing Stevens-Henager College on allegations of illegal recruiting tactics.

The lawsuit, filed in Idaho and made public Thursday, claims the college broke the law by paying recruiters bonuses and commissions to entice new students.

It all came to light after two former employees came forward. One of them is Nannette Wride, the widow of murdered Utah County Deputy Sgt. Cory Wride.

In order for colleges to offer federal student aid, such as loans and grants, schools must agree to not offer recruiters incentives. But the lawsuit claims Stevens-Henager ignored that for many years and lied to the federal government to receive more than $650 million in taxpayer money.

Stevens-Henager is a college with campuses in Utah and Idaho. The federal lawsuit claims the college defrauded the government over a period of about 10 years. A Salt Lake City civil attorney with ties to the case said recruiters even enticed the homeless to cash in on illegal commissions.

"These bonuses were substantial and in some cases would double the client's take home pay," said attorney Brandon Mark. "There was a great incentive that everyone who comes through the door, you've got to make them a student regardless of whether they can benefit from the education or, frankly, even qualify to be a student."

U.S. Attorney Wendy Olsen said Thursday: "Fighting fraud and protecting federal tax dollars from abuse is a priority for this office. Whistleblowers are necessary to our on-going efforts to combat fraud, waste and abuse."

Nannette Wride was one of those whistleblowers. A year before her husband, Deputy Sgt. Cory Wride, was gunned down in the line of duty, Nannette Wride sued Stevens-Henager. She used to be a recruiter and assistant to a dean.

Her claim is part of what alerted federal authorities to investigate Stevens-Henager for two years. But Wride's allegations are separate from the government's complaint. She alleges that some of the college's faculty weren't qualified to teach and Stevens-Henager brushed it under the rug when it was brought to their attention. Her lawyer is Brandon Mark.

"The number of faculty at this point is unknown, it's early in the lawsuit so we haven't been able to do a lot of discovery yet, but we know of at least a handful of faculty members at the Orem campus in particular that were not qualified to teach the classes," Mark said.

Stevens-Henager has 60 days to respond to the lawsuit, Mark said.

However, CEO Eric Juhlin released the following statement:

Stevens-Henager College believes that the recently announced lawsuit is completely baseless and without merit and is providing this statement without further comment due to the pending litigation. Initiation of this lawsuit is an orchestrated attempt by two unprincipled, disgruntled former employees to use the legal system to extort money from the college.

The college’s compensation practices have always complied with federal rules and regulations, consistent with advice given to us by legal counsel, and we are confident that our practices will withstand any legal review.

1.     Stevens-Henager College is an ethical organization with decades of demonstrated compliance with applicable federal regulations and accreditation standards.

2.     Stevens-Henager College’s compensation policy for its admissions consultants, or any other employees involved in the enrollment process, does not allow for any bonuses or payments for simply enrolling students.

3.     Students who enroll into Stevens-Henager College’s degree programs must meet specific enrollment standards, including having a high school diploma or GED. We are passionate about supporting our students and helping them strive to improve their lives through education.

4.    Stevens-Henager College has a 123-year tradition of employing qualified faculty members with education, training, and experience in their respective fields. Our faculty, facilities, and curriculum are periodically and consistently reviewed by accreditors and other regulatory agencies.

5.     Unfortunately, organizations throughout the United States often find themselves having to defend baseless lawsuits. Stevens-Henager College is not immune to this tragic reality.

6.     Stevens-Henager College will aggressively defend itself against these allegations while remaining dedicated to providing our students with high-quality, ethical, and career-focused education and related services.