The United States moved to throw out the complaint that could have cost the university upwards of $75 million in damages and civil penalties. A long time employee at Webster University filed a federal complaint alleging the university committed fraud by overcharging veterans for tuition.
Webster’s Director of Public Relations Patrick Giblin said the Department of Justice and the Veterans Affairs (VA) investigated the complaint and disagreed with the position of the plaintiff, Vincent Stovall.
“The Department of Justice has advised the court that the United States takes the position that Webster University is in compliance with the law,” Giblin said. “The Department of Justice declined to intervene in the case and has now asked the judge to dismiss it as unfounded.”
Stovall, who filed the complaint, is the current eastern regional graduate director for Webster. He has been with the university for 20 years after starting at the home campus in St. Louis in 1998.
Stovall alleged Webster overcharged the VA for veteran tuition under two tuition discount programs that Webster offered to certain students, including non-veteran students. The tuition discounts were two scholarship programs, a “First Responders Scholarship” and the “USA Scholarship.”
Stovall alleged the discount programs violated the federal G.I. Bill. The G.I. Bill prevents schools receiving G.I. Bill reimbursements from charging veteran students a higher rate of tuition than the rate a school charges a non-veteran student.
The first discount program was a “First Responders Scholarship,” in which police and paramedics were charged a lower tuition rate which was equal to the rate of active-duty military students.
The second was the “USA Scholarship” which was awarded to qualifying family members of active-duty military members, as well as federal contractors and employees. If they attended classes on one of Webster’s military campuses, they were charged the military rate.
Stovall filed the complaint against Webster University in September 2015. He began his work with Webster University as a university bursar in St. Louis. Since then, he worked as the assistant graduate director for the Webster’s Columbia, S.C. metropolitan campus as well as the graduate director for Webster’s Fort Jackson campus.
Thomas SanFilippo of The Law Firm of Thomas SanFilippo and Associates, LLC. said this action would qualify as a Qui Tam suit under the False Claims Act (FCA). A qui tam suit allows a private citizen, like Stovall, to present evidence of fraud against federal programs and sue the wrongdoer on behalf of the U.S. The Law Firm of Thomas SanFilippo is not related to this case but provided legal clarification.
Stovall requested Webster pay three times the damages the government may have sustained because of the university’s actions in addition to civil penalties, according to the complaint and the FCA. The action claimed $4.7 million in damages, so three times the damages would be $14.3 million.
It claimed civil penalties could range between $5,500 to $11,000 for each of the 5,441 that Stovall claimed were FCA violations. This would result in civil penalties between $30 million and $60 million.
Added together, if the university was found liable and guilty of fraud, the damages and civil penalties could have ranged between $44.2 and $74
million.
SanFilippo said as part of a Qui Tam action, the filer can recover 15 to 25 percent of the damages from the complaint if the government intervenes and recovers funds through a settlement or trial.
Stovall interpreted the tuition-discount program as in violation, but Stovall’s argument is inconsistent with the U.S.’s interpretation of the problem, according to the U.S. statement to dismiss the complaint.
“The VA does not consider an educational institution to have violated – and overcharged the VA – when the institution implements a tuition-discount program for which all students, veterans and non-veterans alike, are eligible,” the memorandum said.
In addition, the United States’ statement said it does not see any public interest in continuing to back this complaint after performing their own investigations. The statement said the U.S. did not agree with Stovall’s position, therefore did not see a reason to continue to spend time and resources on the case.
G.I. Bill
Webster was initially approved to become a G.I. Bill school in 1966 by the Missouri State Approving Agency (SAA).
Missouri SAA Director James Henley said it is the responsibility of the SAA to visit approved educational institutions. There, the SAA determines continued compliance with appropriate state and federal laws and regulations.
“SAA’s mission is to promote and safeguard quality education and training for veterans, ensure greater education and training opportunities to meet the changing needs of veterans and assist the VA in preventing fraud, waste and abuse in the administration of the G.I. Bill,” Henley said.
In November 2016, North Carolina’s SAA Executive Director Joseph Wescott wrote to Webster’s president, Elizabeth Stroble, with an official notification of suspension of approval for G.I. Bill benefits. The suspension began Nov. 11, 2016 and would last for up to 60 days pending presentation of adequate documentation.
The letter cited the “First Responder Scholarship” and “USA Scholarship.” It said the discount programs appeared to be a misleading enrollment practice under the G.I. Bill. Under the suspension, Webster’s North Carolina campuses were unable to certify qualified students to receive G.I. Bill education benefits.
Wescott said in order to have the suspension lifted, Webster would need to provide proof “a veteran student who does not qualify for a scholarship or other additional discount” would not pay a higher tuition rate than a similar non-veteran. This means a non-veteran student with similar grades, GPA, income, etc.
The suspension was lifted from the North Carolina campuses on Jan. 5, 2017 after Webster presented the appropriate documentation.
If a school is found liable of deceptive practices, Henley said one of the consequences is suspension of approval or a withdrawal of a particular program or institution, depending on the situation.
Carrie Wofford from the Veteran Education Success said if a school is cut-off by the VA from future G.I. Bill money, qualified students would no longer be able to receive money at that particular school. They would have to find another approved school to use their G.I. Bill education benefits.
Webster University’s response to the United States’ motion to dismiss this case and Stovall’s response in opposition are due by Thursday, Feb. 22.
Stovall and his lawyers were unable to be reached by time of publication.
The Journal will continue to update this story as more information becomes available.
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