USA Lashes Dallas-Area Trade Schools

DALLAS (CN) - ATI Enterprises, a profit-seeking trade school, lied about its graduates' job placement rates - and plenty of other things - to get federal funding, the Justice Department claims in court.

The Department of Justice intervened in a federal lawsuit filed in 2009 by six former ATI employees who worked in admissions, career services and financial aid. Uncle Sam's complaint was unsealed last week.

Defendant ATI Enterprises does business as co-defendants STI Technical Training Center, ATI Career Training Center, and ATI Career Training.

From 2007 to 2010 ATI fabricated job placement statistics for graduates from three Dallas-area campuses, to maintain its state license with the Texas Workforce Commission and federal student aid funding from the Department of Education, the complaint states.

Prosecutors also accuse ATI of false advertising to induce students to enroll, in violation of state and federal regulations.

"For example, ATI recruiters used the fabricated placement statistics ATI reported to the TWC as a tool to induce students to enroll in Campuses 10, 30 and 50," the complaint states.

"ATI recruiters lied to prospective students at Campuses 10, 30 and 50 about the amounts of money they should expect to earn in their chosen fields after graduation from ATI. ATI also enrolled certain students into particular programs of study without telling those students that they would likely be disqualified from employment in their chosen field upon graduation (e.g. because of a prior felony conviction). As a result of ATI's misrepresentation, these students expended significant time learning a trade, and incurring substantial debt, only to be barred from employment in their fields upon graduation."

ATI also lured back applicants who had dropped out of the trade school by promising that their existing federal loan debt would be forgiven if they re-enrolled, the complaint states.

"But ATI had no intention of repaying the students' federal loan indebtedness," Uncle Sam says.

ATI is also accused of fabricating high school diplomas for applicants, to enroll them at ATI, and then improperly taking Title IV money for the unqualified students.

"ATI also routinely altered grades and attendance records of students at Campuses 10, 30 and 50 who were not meeting minimum requirements. ATI kept students on its attendance rolls - and, as such, federal financial aid recipient list - by extending graduation dates fraudulently as well. Finally, ATI employees falsified financial aid records in order to secure more federal funding for students than the students were eligible to receive," the complaint states.

Twenty-one former students sued ATI in Dallas County Court in February 2010, claiming they were charged thousands of dollars for educations that did not unqualify for their promised careers.

In business for more than 35 years, ATI operates campuses in Florida, Oklahoma, New Mexico and Texas, including four the Dallas-Fort Worth area. ATI offers programs in dental assisting, nurse assisting, air conditioning, welding, business administration technology and network administration, among others, according to its website.

The federal government seeks punitive damages and an accounting for unjust enrichment, payment by mistake and violations of the False Claims Act.

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