Former Recruiters Claim Fraud At Academy Of Art In San Francisco

SAN FRANCISCO (CBS / AP) — Four former recruiters at the Academy of Art University in San Francisco are accusing school officials of using an illegal compensation plan to cheat the federal government out of millions of dollars in financial aid.

In a suit filed in federal court, the former employees claim the school adjusted their pay up or down, depending on how many students, they registered. The suit also claims the school offered bonus trips to Hawaii as an incentive, then lied to the government about the incentives.

Attorney Stephen Jaffe, who is representing the former recruiters, says they are suing under the False Claims Act, a federal law that allows individuals to sue on behalf of the government, and receive 15 to 30 percent of any settlement or money recovered.

The school denies any wrongdoing, while saying the compensation plan was legal.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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