Giant Scandal Alleged at Princeton Review

MANHATTAN (CN) - The Princeton Review, a leading preparer of prep courses for standardized tests and college admissions, took "millions of dollars" of federal money to tutor underprivileged children in New York City, but never provided the services, federal prosecutors said.

The United States and New York State sued the Princeton Review and its former employee-director Ana Azocar in Federal Court.

The governments seek treble damages under the False Claims Act for allegedly fraudulent reimbursement claims. They claim the Review charged the New York Department of Education for "thousands of hours of tutoring service" that it never provided.

The Princeton Review prepares preparation tests for the Scholastic Aptitude Test (SAT) and other leading standardized tests, including the Graduate Management Admissions Test (GMAT) and the Law School Admissions Test (LSAT).

In announcing the lawsuit, prosecutors in a statement accused the Review and Azocar of "repeated submission of false claims for reimbursement in connection with a federally funded program to provide tutoring services to underprivileged children in New York City. As a result, Princeton Review received millions of dollars in federal funds for tutoring services that it did not provide."

Prosecutors say the Review took money from 2002 to 2010 for services it did not provide to poor children. The Review was paid per hour for each student it supposedly tutored in New York City.

Azocar was a site manager and then a director during that time, according to the complaint.

According to the U.S. attorney's statement: "At each of its tutoring classes, Princeton Review had students sign in and out on an attendance form. The company was required to keep a daily attendance record as a condition of getting paid. However, many of Princeton Review's site managers - employees who oversaw the day-to-day operations of its New York City SES [Supplemental Educational Services] program - routinely falsified entries on the daily student attendance forms to make it appear as though more students had attended tutoring classes than had in fact attended. Azocar and other supervisors (called 'Directors') used threats of termination and pay cuts to pressure Site Managers to maintain high daily student attendance. Azocar also instructed and/or encouraged some site managers to falsify entries on the attendance forms, including by signing in for absent students."

In one case, the Review charged for tutoring 74 students on New Year's Day, when there were no classes, prosecutors said. They claim the Review also "maintained an incentive compensation system that encouraged the falsification of attendance records."

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