Princeton Review to Pay $10 Million to Settle False Claims Act Charge

Education Holdings Inc., which prior to May 2012 was known as The Princeton Review,  will pay $10 million to settle charges that it repeatedly submitted false claims for reimbursement in connection with a federally-funded program to provide tutoring services to children at under-performing schools in New York City.

In May 2012, Education Holdings sold the name and brand of The Princeton Review to Charlesbank Capital Partners.

In the settlement, Education Holdings admitted, acknowledged, and accepted responsibility for engaging in fraudulent conduct while it was doing business as Princeton Review, including falsifying student attendance records and submitting claims for reimbursement for tutoring services that it did not provide.

Education Holdings will pay up to $10 million to the United States in damages and penalties under the False Claims Act.

Education Holdings was represented by Guy Petrillo of Petrillo Klein & Boxer in New York City.

“Every dollar wrongly taken in this case was taken from a child who was entitled to help in achieving academic success and through that a better life,” said U.S. Attorney Preet Bharara. “Sadly, the fraud here happened on a massive scale – through the repeated and systematic subversion of the goals of a federal program intended to provide essential tutoring services to children to give them a chance to succeed academically.”

“While doing business as the Princeton Review, Education Holdings created a culture of fraud, incentivizing Directors to pressure Site Managers to report high attendance numbers, which the Site Managers did by fabricating student attendance records and billing the government for tutoring services they never provided. As a result, the company enriched itself while leaving the children behind. We are pleased that, with this settlement, Education Holdings has accepted responsibility for its conduct, and agreed to pay millions of dollars in damages and penalties.”

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