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July 17, 2013

7th Circuit Revival: Rules FCA case against ITT should proceed to trial

In a unanimous decision and strongly-issued opinion, the 7th Circuit Court of Appeals reversed the dismissal of a recruiter-fraud lawsuit against ITT Education Services, Inc. last week, decisively overturning the prior Indianapolis District Court opinion on all grounds. The qui tam case brought by whistleblower Debra Leveski alleges that ITT unlawfully procured hundreds of millions of dollars in funds paid for by taxpayers based on a complex recruiter-fraud scheme.

In addition to ruling for Leveski on all grounds, the Seventh Circuit dismissed a sanctions order from the district court that was imposed upon the solo lawyer and his law firm that filed the case along with the two firms currently representing Leveski, Motley Rice and Plews Shadley Racher Braun LLP (PSRB).

ITT received hundreds of millions of dollars in taxpayer funds during the time period covered by the complaint, and according to Barron’s, has one of the highest student loan default rates. Iowa Senator Tom Harkin’s HELP Committee has found that the enormous cost to taxpayers of loans to for-profit schools like ITT is a huge drain on our national resources and a significant national problem.

Read the full press release.

Read more in several articles that have been published about this decision:

July 10, 2013
American Bar Journal
7th Circuit erases $400K sanction against Motley Rice, revives whistleblower case

July 9, 2013
Indiana Lawyer
7th Circuit reverses sanctions against Plews Shadley, other firms in False Claims Act case

July 9, 2013
Indiana Law Blog
Ind. Decisions – more on “7th Circuit panel reinstates false claims suit against ITT”

July 9, 2013
American Lawyer
Court revives ITT whistleblower case, erases Motley Rice sanctions

July 9, 2013
Reuters – Alison Frankel On the Case
Case sparked by plaintiffs’ lawyer? nothing wrong with that: 7th Circuit

July 8, 2013
Law360
7th Circ. revives FCA suit over ITT recruiter pay (access for subscribers only)