Education Management Corporation (EDMC) is paying $95.5 million to settle a casealleging itfalsely obtained federal and state education funds.The nearly $100 million settlement is the largest false claims settlementwith a for-profiteducationalinstitute in history,US Attorney General Loretta E. Lynch said during a press conference Monday announcing the resolution.The collegeoperated as a "high-pressure recruitment mill" and illegally paid recruiters based on how many students they enrolled, according to Lynch.EDMC is the nation's second-largest for-profit college system and the parent company of four higher education systems: Argosy University, The Art Institutes, Brown Mackie College, and South University. It was acquired by Goldman Sachs in 2006, which retains 40% ownership in the company today."This settlement should be a very clear warning for other career colleges out there," Secretary of Education Arne Duncan said at the press conference."We will not stand by when you profit illegally off of students and taxpayers."For its part, EDMC acknowledged the settlement's allegations, though it claims the allegations were unmerited.We are pleased to have resolved the civil claims raised by the Department of Justice and state attorneys general," EDMC wrote in a press release. "Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students.The settlement comes amid a shaky environment for the for-profit college industry. In October, Apollo Education Group, the parent company of The University of Phoenix (UoP), was suspended from recruiting military student by the Department of Defense (DoD).The school has been accused of using predatory tactics to lure in military personnel.Another for-profit behemoth, Corinthian Colleges, abruptly filed forChapter 11 bankruptcy protection in April after an ongoing investigation by the ED and a $30 millionfine.That fine, which was just the latest blow for the troubledfor-profit network, set into motion a number of events that led Corinthian to announcethat it would close its remaining campuses for good.Across theentire for-profit sector, there have beenallegations that the schools focus onsigning up students and depositing their federal financial aid checks rather than providing a quality education.Almost all of the biggest players in the for-profit sector have beeninvestigatedby state attorneys general, including EDMC, ITT, Career Education Corporation, Kaplan, DeVry, andBridgepoint.SEE ALSO:Here's one more sign that the for-profit college industry is in troubleJoin the conversation about this storyNOW WATCH: Former Princeton admissions director reveals the biggest mistakes applicants make
Click here to read full news..
