Whistleblower Lawsuit Accuses ITT Tech Of Defrauding Government, Using Deceptive Recruitment Practices

ittadA recently unsealed whistleblower lawsuit against for-profit college chain ITT Technical Institute accuses the school of operating a “systematic scheme” to defraud the government by using a litany of abusive, deceptive practices to enroll students. 

The lawsuit [PDF], filed last April by a former dean of academic affairs at ITT’s Tallahassee campus who says he was fired after reporting abuses to higher-ups, was unsealed this week after the Department of Justice declined to join the complaint.

The former employee claims, among other things, that ITT purposefully recruited students who were not qualified to attend the school – including one specific incident where a student who could barely write a coherent sentence was enrolled – in order to secure more federal financial aid dollars.

ITT Tech recruiters were also allegedly encouraged by the director of recruitment, the college director, and other officials to “probe” potential students about “what causes pain in their lives” and to “dig in” to that pain to get them to enroll, MarketWatch reports.

Additionally, the suit claims ITT unlawfully pays sales commissions to recruiters and provides false information to students about their financial obligations, the transferability of ITT credits to other schools, and about their employment opportunities after graduation.

In once case, the suit claims that an ITT graduate was told they could get jobs as forensic scientists similar to those in the television show CSI Miami if they enrolled in the school’s criminal justice program. However, according to the suit, ITT’s program didn’t offer the science training necessary to work as a forensic scientist.

The former dean says that when he and another employee found out what recruiters had promised the criminal justice students, they went to classrooms to inform students about the false information. At that point, he says many students “became upset…and dropped out.”

The Tallahassee campus subsequently shut down the criminal justice program. The director of recruiting told his staff that prospective students interested in criminal justice “should be steered to the business management program and told that they will be able to open their own private investigation business, even though that is not what the Business Management program is designed to train students to do.”

The suit also claims that ITT promised prospective students that if they enrolled they would receive “free laptops.” In reality, the laptops were far from free. Instead, they replaced the textbooks whose $800 cost had been built into student tuition.

A spokesperson for ITT Technical tells MarketWatch that the company doesn’t comment on litigation, but noted that the company denied the allegations and intends to “vigorously” defend itself.

This isn’t the first time accusations of abuse and deceptive practices have been levied against ITT Tech.

In May 2015, the SEC filed fraud charges against current and former executives with the company for their part in concealing problems with company-run student loan programs.

The charges against the company, former CEO Kevin Monday and current CFO Daniel Fitzpatrick stem from their alleged fraudulent concealment of the poor performance and looming negative financial impact of two student loan programs the company financially guaranteed to investors.

According to the SEC complaint [PDF], the loans performed so poorly by 2012 that the company’s guarantee obligations were triggered. However, instead of disclosing the issue to investors, the SEC alleges that ITT and the executives engaged in a fraudulent scheme and made a number of false and misleading statements to hide the magnitude of ITT’s guaranteed obligations to the loan programs.

Before that, in February 2014, the Consumer Financial Protection Bureau sued ITT for allegedly pressuring students into predatory loans and misleading students on future job prospects and salaries.

Whistleblower suit against for-profit college charges schemes against students [MarketWatch]