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EXCLUSIVE: Whistleblowers in Stevens-Henager College lawsuit speak out

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Posted at 11:01 PM, May 14, 2014
and last updated 2014-05-15 01:01:48-04

OREM, Utah -- The federal government is suing Stevens-Henager College on allegations of illegally recruiting students and now an amended complaint says the problem is even more widespread.

Two former employees, turned whistleblowers, talked for the first time exclusively with FOX 13.

Nannette Wride worked at Stevens-Henager's Orem campus from 2009 to 2011. That's where she met Katie Brooks who was also a recruiter.

The two describe a cut-throat recruiting practice that they gradually began to question. It's a practice the federal government claims was illegal.

"I was told that every person I would sign up that I would receive a bonus," Wride said.

The government claims that Stevens-Henager's method to recruit students broke federal law and the college fraudulently obtained at least $660 million dating back to January 2002.

The U.S. Attorney's Office in Idaho names campuses across the west in its lawsuit to recover some of that money.

"A lot of the practices were shady. A lot of the people after I would sign them up and I would bring my concerns to my boss, I would say, ‘I'm really concerned about these students,’ he said, ‘it doesn't matter unless it counts on our circle,’" said former recruiter Katie Brooks

Brooks claims regardless of whether students were qualified or completed the program, as long as she signed students up, the bonuses rolled in and doubled her salary one year.

The whistleblowers’ lawyers filed an amended complaint Tuesday alleging that illegal commissions were part of a system-wide practice.

That's based on interviews with witnesses and former executives.

"Just confirms that, that the bonuses against federal regulations were being paid at all of these campuses," said Salt Lake civil attorney Joe Stultz.

Plus, there are also allegations recruiters targeted low-income and homeless populations.

"I didn't personally do that," Wride said. "But there was someone living under the viaduct that got signed up because he had a Social Security Number and was told he could live there and be warm through the winter and go to school."

Wride claims she also discovered a handful of faculty members at the Orem campus who weren't qualified to teach.

Stultz said that was also happening in Idaho.

"There were recent graduates from the college that were immediately being recycled into faculty members without having the proper amount of experience accredited to teach those classes," Stultz said.

Wride said when she brought it to the campus president's attention before she left in 2011, nothing was done.

Eric Juhlin, CEO of Stevens-Henager, referred FOX 13 to a statement he released Friday. You can read it in its entirety below but it says, in part, that the college followed federal law and regulations and "this lawsuit is an orchestrated attempt by two unprincipled, disgruntled former employees to use the legal system to extort money from the college."

"I could care less about money or anything else -- I just want to do the right thing and these people need to be called out," Wride said.

Wride now works as a respiratory therapist after earning an Associate’s degree at Stevens-Henager and believes her teachers were qualified but feels bad for other students.

Some have contacted her attorney saying they've been saddled with thousands of dollars in debt regardless of whether they completed their degree or not.

The whistleblowers' firm, Parsons Behle & Latimer, recommend students call state consumer protection advocates and say a class action lawsuit is unlikely and challenging because each student is in a different scenario.

They may want to contact an attorney individually to first determine if they have a case.

Read CEO Eric Juhlin’s full statement below:

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.