Helicopter co., Kansas college settle $7.5 million lawsuit with VA

Whistleblower to receive $1.125 million payout
A Helicopter company and community college in Kansas will pay a combined $7.5 million to settle a suit with the VA after it was found rules of the Post-9/11...
Published: Aug. 16, 2022 at 8:40 AM CDT
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TOPEKA, Kan. (WIBW) - A Helicopter company and community college in Kansas will pay a combined $7.5 million to settle a suit with the VA after it was found rules of the Post-9/11 GI Bill program were broken. The veteran whistleblower who brought the issue to federal attention will also receive $1.125 million of that.

The U.S. Department of Justice says on Monday, Aug. 15, that Universal Helicopters Inc., a private helicopter flight instructor training company, and Dodge City Community College agreed to pay $7.5 million to settle allegations that they violated the False Claims Act when they made false statements to the U.S. Department of Veterans Affairs about a helicopter flight instructor training program jointly run by the pair.

The DOJ noted that the VA provided financial aid as part of the Post-9/11 GI Bill to veterans who took the program. However, the U.S. alleged that from 2013 to 2018, the pair made or caused false statements to the VA regarding enrollment in the program in order to gain VA funding. UHI has agreed to pay $7 million while DCCC agreed to pay $500,000 to settle the allegations.

“The Post-9/11 GI Bill provides significant educational opportunities to our nation’s veterans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to help safeguard the integrity of VA programs intended for the advancement and benefit of veterans.”

As part of the Post-9/11 GI Bill program, the Department indicated that the VA provides tuition and fee payments directly to qualifying schools on behalf of eligible veterans or dependants. To qualify for the program, among other things, a school is required to certify to the VA that no more than 85% of students in any particular course receive VA benefits.

This requirement, commonly referred to as the 85/15 Rule, is meant to prevent abuse of the program’s funding by ensuring the VA pays fair market value for tuition rates since at least 15% of the enrolled students would be paying the same rate with non-VA funds, according to the DOJ.

“One of the ways the U.S. government demonstrates gratitude to our veterans is by creating programs intended to create easier paths to accessing higher education,” said U.S. Attorney Duston Slinkard for the District of Kansas. “It’s disheartening that any institution of higher learning would submit inaccurate information in order to improperly receive funds designed to benefit those who serve our nation.”

To decide whether a school is in compliance with the 85/15 rule, the DOJ said full-time non-VA-supported students enrolled in a particular course are compared to the number of full-time veteran students enrolled in the same course. It said a separate ratio must be computed for each course.

“This case demonstrates the VA Office of Inspector General’s (OIG) commitment to aggressively pursue schools who target veterans’ education benefits,” said Special Agent in Charge Rebeccalynn Staples of the VA OIG’s Western Field Office. “The VA OIG will continue to work with its law enforcement partners to protect the integrity of VA’s education benefits program and urges anyone with knowledge of possible fraud against VA to contact the OIG’s hotline at 1-800-488-8244.”

The DOJ noted that the settlements resolve the allegations that UHI and DCCC falsely certified compliance with the 85/15 rule when the flight instructor program included certain expensive classes that were taken almost exclusively by veterans.

“The alleged violations occurred prior to the current college administration and current helicopter provider. DC3 severed all ties to UHI between late 2018 and early 2019. In addition, all DC3 employees who were affiliated with the program during the time the alleged violations occurred are no longer employed by the college,” said Dodge City Community College in a statement. “DC3 would like to acknowledge the VA, the DOJ, and their respective staffs for their professionalism, dedication and assistance throughout this process. The college is also grateful to Provost Dr. Adam John, President Dr. Harold Nolte, the DC3 Board of Trustees led by Chairman Gary Harshberger, and the rest of the DC3 staff and administration for working so tirelessly to provide transparency, to decrease debt, and to rebuild the helicopter program. Since the establishment of the partnership with Quantum Helicopters and the implementation of the recommended changes from the VA, the DC3 helicopter program has steadily improved since 2019, and it now has approximately 70 students enrolled.”

In addition to the settlement, the Dept. indicated that in the DCCC settlement, the U.S. alleged that to reach the required threshold, it counted part-time students enrolled in only one online class per semester as full-time students - which violates the VA rules.

The Department said the civil settlements also include the resulting of claims brought under whistleblower provisions of the False Claims Act by William Rowe - a veteran and former student in the flight program. Under those provisions, it said a private party can file an action on behalf of the U.S. and receive part of any recovery - in this case, Rowe will receive $1.125 million as his share.

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