Caldwell University ‘Hoodwinked’ Vets With Online Classes: Feds

CALDWELL, NJ — Caldwell University has agreed to pay more than $4.8 million as part of a civil settlement involving online classes and the Department of Veterans Affairs, prosecutors said.

The university’s payment will resolve allegations that it engaged in a fraudulent scheme to defraud a federal education benefit program, the U.S. Attorney’s Office announced Friday.

Prosecutors said the claims settled by the agreement are allegations only, and that there has been no admission of liability.

“Caldwell University tried to hoodwink the Department of Veterans Affairs and, worse, veterans themselves, by claiming to offer online classes developed and provided by Caldwell that were in fact marked-up offerings by an online correspondence school,” U.S. Attorney Craig Carpenito said.

“Our veterans should never be treated this way, and we will continue to work to ensure that they receive all of the benefits that they deserve as a result of their service to the country,” Carpenito said.

According to the settlement agreement, from Jan. 1, 2011 to Aug. 8, 2013, Caldwell University allegedly submitted false claims for payment to the Department of Veterans Affairs (VA) in order to receive education benefits and funds pursuant to the Post-9/11 Veterans Education Assistance Act (Post 9/11 GI Bill) to which it was not entitled.

The Post 9/11 GI bill was designed specifically to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, prosecutors said.

According to the U.S. Attorney’s Office:

“Three individuals previously pleaded guilty to separate informations charging them with one count of conspiracy to commit wire fraud related to this scheme to defraud the VA. Lisa DiBisceglie, the university’s former associate dean of the Office of External Partnership; David Alvey, founder and president of Ed4Mil LLC; and Helen Sechrist, a former employee of Ed4Mil, admitted their respective roles in the conspiracy to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits from the Post-9/11 GI Bill. Alvey was sentenced on June 4, 2018, to five years in prison. DiBisceglie and Sechrist were each sentenced on June 5, 2018, to three years of probation. All three defendants were also ordered to pay $24 million in restitution.”

Prosecutors stated:

“[Caldwell University] contracted with Ed4Mil to recruit and enroll eligible military veterans in non-degree fully online classes that were purportedly provided by Caldwell. DiBisceglie helped get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application to the VA stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. The VA approved the online courses for education benefits under the Post-9/11 GI Bill based upon the representations in Caldwell’s application.”

“However, Caldwell did not participate in developing or teaching the online courses,” prosecutors said. “The courses were developed, taught, and administered by a sub-contractor of Ed4Mil, an online correspondence school in Pennsylvania that was not approved to receive education benefits under the Post-9/11 GI Bill.”

According to prosecutors, thousands of veterans were ultimately enrolled in the unapproved online correspondence courses without their knowledge while Caldwell University and Ed4Mil profited.

“Even though Caldwell contributed no content or value to the courses, Caldwell charged the Post 9/11 GI Bill 10 to 30 times the prices charged by the online correspondence school for the same courses,” prosecutors charged. “As a result, the government paid over $24 million in tuition benefits to the university.”

Prosecutors added:

“Allegations of fraud involving a separate government education benefit program were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam complaint alleges that Caldwell and Ed4Mil fraudulently obtained education benefits under the Department of Defense Tuition Assistance program. This settlement resolves federal allegations that Caldwell defrauded the Post-9/11 GI Bill administered by the VA, along with the qui tam action.”

CALDWELL UNIVERSITY: 'THIS CONDUCT WILL NOT HAPPEN AGAIN'

A spokesperson with Caldwell University offered Patch the following statement on Tuesday.

"Caldwell University recently entered into an agreement with the United States Attorney's Office for the District of New Jersey to resolve an investigation dating back to 2013.

"Between 2009 and 2013, Caldwell College had a contractual relationship with Ed4Mil, a company that provided on-line training courses to veterans in conjunction with Caldwell. Unbeknownst to Caldwell's Board and Cabinet, Ed4Mil personnel and a college employee engaged in a scheme to defraud the Government. The college employee separated from employment with Caldwell before the scheme was discovered. A number of people from Ed4Mil, including its principal, and the former Caldwell employee have pleaded guilty to criminal charges.

"The Board of Trustees and the Cabinet of Caldwell University have denounced this conduct. The administration and Board of Trustees are truly sorry for what occurred. Caldwell University cooperated with the government throughout its investigation.

"Caldwell has been committed to making restitution to the United States on behalf of the veterans of our country by returning all of the money that the University was paid under the Ed4Mil contract. To that end, as part of the agreement with the United States Attorney, Caldwell has agreed to pay $4.8 million, representing the funds Caldwell received under the contract with Ed4Mil.

"Since becoming aware of the misconduct in August 2013, Caldwell University has developed new policies and procedures to ensure that this type of conduct will not happen again."

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