A former compliance officer at a Northeast Ohio for-profit college chain has been awarded $227,000 for exposing what federal officials describe as a scheme to fake graduation rates and pocket unearned student financial aid. Christopher Wargo, who served as Chief Operating and Compliance Officer for American Higher Education Development Corp. (AHED), filed suit in federal court in Pennsylvania in December 2023 alleging the company manipulated data at its Stautzenberger College campuses in Ohio and elsewhere.
AHED agreed to pay just over $1 million total to resolve the allegations, which the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced on July 1, according to the U.S. Attorney’s Office for the Eastern District of Pennsylvania. As reported by Cleveland.com, the $1.03 million settlement includes $413,000 in unearned Federal Student Aid that AHED allegedly never returned when students dropped out, plus additional funds earmarked for the U.S. Department of Education and for Wargo’s attorney and court costs. The settlement does not require AHED to admit liability, and the government did not concede that its claims were unfounded.
How “Reverse Starts” Allegedly Boosted the Numbers
Stautzenberger College operates campuses in Brecksville, Maumee and Toledo, offering associate’s degree programs in fields including veterinary technician work, practical nursing and business administration that run between seven and 24 months, per the Cleveland.com report. According to the settlement, AHED began manipulating graduation rates in 2016 at Stautzenberger College, Rockford Career College in Illinois, and the Madison Media Institute in Wisconsin, which AHED closed in 2018.
The alleged mechanism was something the settlement calls a “reverse start” — retroactively removing students who withdrew from school tracking systems as though they had never enrolled in the first place, which had the effect of inflating the campuses’ reported graduation rates. The practice reportedly stopped before the government’s investigation began, but not before it left a visible mark on the numbers. At the Maumee campus, reported compliance with accreditor graduation benchmarks sat at 100% from 2019 through 2021, then fell to 54.2% in 2023 once the practice ended, according to Wargo’s attorneys at Goldberg Kohn…