U. of Phoenix in Talks to Settle False Claims Lawsuit

October 1, 2009

The University of Phoenix is in discussions aimed at settling a lawsuit filed by former employees who accuse the for-profit college of violating federal law by paying incentives to its recruiters, the institution's parent company, the Apollo Group, announced Wednesday. The lawsuit, which accuses Phoenix of defrauding the federal government and was brought under the federal False Claims Act, is pending before the U.S. Court of Appeals, and the university potentially has billions of dollars at stake. Apollo's announcement said that the company and lawyers for the plaintiffs had requested a 45-day stay of all proceedings in the case. Lawyers for the plaintiffs could not be reached for comment.

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