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Helicopter Flight School and Community College Pay $7.5M to Settle False Claims Acts Whistleblower Lawsuit

iStock-513229490-300x200Pilot training program allegedly falsified enrollment figures to obtain millions in Veterans Affairs funding.

Universal Helicopters Inc. and Dodge City Community College have paid $7.5 million to resolve allegations they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs in connection with a training program they jointly run for helicopter pilot flight instructors in Ford County, Kansas and Chandler, Arizona.

Universal paid $7 million, while Dodge City paid $500,000—an amount the U.S. Department of Justice noted was based on Dodge City’s ability to pay.

The lawsuit was originally brought under the qui tam or whistleblower provisions of the False Claims Act by a former student in the training program.  The qui tam relator, a military veteran, received a False Claims Act whistleblower award, paid out of the recovery, of $1.125 million.

Post-9/11 GI Bill flight-school funding

Helicopter flight instructor training programs have become more prevalent because helicopter pilots cannot be employed commercially unless they achieve a certain number of flight hours.  To complete the hours they need, new pilot graduates often work as flight instructors.  This has created a “boom” in helicopter flight training programs aligned with community colleges, according to the whistleblower’s False Claims Act complaint.  In this case, Universal teamed up with Dodge City, which has campuses in Kansas and Arizona, to run their flight instructor training program.

The whistleblower alleged that from 2013 to 2018 Universal and Dodge City made false statements to the VA about program enrollment figures to obtain millions of dollars in VA funding to which they were not entitled.

Under the Post-9/11 Veterans Educational Assistance Act of 2008—known as the Post-9/11 GI Bill or the New GI Bill—the VA provides educational benefits including tuition and fee payments to qualifying schools on behalf of military veterans who have served since September 11, 2001. This includes financial support and educational benefits for military veterans to pursue helicopter pilot flight training degrees.

Schools receiving Post-911 GI Bill funds are required to certify to the VA that no more than 85% of their students are VA-funding recipients.  The purpose of this requirement—referred to as the “85-15 Rule”—is to help ensure that the tuition rates paid by the VA reflect fair market value for the education provided.  Schools must submit to the VA accurate enrollment data and sworn certifications that the 85-15 requirement is satisfied.

Submission of false certifications

Universal and Dodge City charged average tuition rates for their program’s pilot instructor training of about $60,000 per semester, according to the whistleblower’s complaint.  At those levels, however, it was impossible for Universal and Dodge City to recruit “‘non-supported’ students willing to pay out-of-pocket in line with what [Universal and Dodge city] could get away with billing the VA for its supported students,” the whistleblower alleged.

As a result, Universal and Dodge City decided to evade the enrollment requirement by falsely certifying compliance with the 85-15 Rule despite that virtually all their students were military veterans whose tuition was paid by the VA, according to the whistleblower’s False Claims Act complaint.  In addition, Universal and Dodge City violated VA rules by counting part-time students enrolled in only one online class per semester as full-time students to help appear to reach the required 15% threshold, the whistleblower alleged.

False Claims Act Whistleblower awards

The False Claims Act, which dates back to the Civil War, imposes substantial liabilities—three times damages plus penalties—on persons who knowingly defraud the federal government or its agencies.  Under the False Claims Act’s qui tam provisions, whistleblowers are entitled to file lawsuits on behalf of the United States and receive whistleblower awards of 15-30% of any recovery as well as legal fees and expenses.

Free legal consultation

If you know of parties obtaining government funds by fraudulent means, reach out to whistleblower attorney Mark A. Strauss for a free consultation about your rights as a potential False Claims Act relator.