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BarBri Wins Exit From Whistleblower’s Student Loan Fraud Suit

Sept. 17, 2021, 2:15 PM

BarBri Inc. won dismissal from a False Claims Act suit alleging it falsely certified its compliance with U.S. Department of Education student loan requirements, due to the whistleblower’s failure to respond to the company’s dismissal motion, the U.S. District Court for the Northern District of Illinois said.

Edward Allen waived his claims because he didn’t address BarBri’s assertion that they were based on public information and therefore precluded by the FCA’s public disclosure bar, Judge Ronald A. Guzmán said.

Allen argued that his amended complaint, if allowed, would allege matters that would overcome the bar. But his amended allegations don’t cure the deficiencies in the original complaint, the court said in a Sept. 15 order.

BarBri’s motion said Allen was a “copycat” whistleblower who raised allegations that were nearly identical to allegations in two prior whistleblower suits.

The court also denied Allen’s motion seeking reconsideration of a July 21 decision that the public disclosure bar precluded his claims against Sterling Capital Partners LP and Kaplan Inc. Allen offered no basis to ignore binding precedent concerning the public disclosure bar against those defendants, the court said.

Allen, a former student at Arizona Summit Law School, alleged in his November 2019 complaint that Sterling, Kaplan, BarBri, three for-profit laws schools, and InfiLaw Corp. engaged in a scheme to submit or cause to be submitted false claims for student loans from federal student aid programs.

Allen said the defendants made false statements about compliance with a Department of Education rule that for-profit institutions must derive at least 10% of their revenue in a given year from sources other than department funds.

Polsinelli PC represented BarBri. Jennifer Sodaro of Scottsdale, Ariz., represented Allen.

The case is Allen v. Sterling Capital Partners LP, N.D. Ill., No. 19-cv-7289, 9/15/21.

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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