Oral Roberts University (ORU), based in Tulsa, Oklahoma, will pay $303,502 to resolve allegations under the False Claims Act of submitting false claims to the U.S. Department of Education in violation of the federal ban on incentive-based compensation, the Department of Justice announced.

Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment. The incentive compensation ban protects students against admissions and recruitment practices that serve the financial interests of the recruiter rather than the educational needs of the student.

“The integrity of our system of higher education is founded on allowing students to make enrollment decisions based on their own educational interests,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will not allow these important decisions to be compromised by educational institutions offering recruiters financial incentives to enroll students.”

“Our higher education system should prioritize the educational interests of students, not the financial interests of schools and recruiters,” said U.S. Attorney Sherri A. Lydon for the District of South Carolina. “The U.S. Attorney’s Office will fight to protect against misuse of federal taxpayer dollars intended to serve students’ educational needs.”

The settlement resolves allegations that between 2014 and 2016, ORU hired Joined Inc. to recruit students to ORU. ORU allegedly compensated Joined in part with a share of the tuition that ORU received from the enrollment of recruited students, in violation of the prohibition on incentive compensation.

“The Office of Inspector General has a unique and special law enforcement mission – to protect public education funds for eligible students. This settlement is an example of our commitment to this mission,” said Neil Sanchez, Special Agent in Charge of the U S. Department of Education Office of Inspector General’s Southern Regional Office. “The OIG will continue to work with our law enforcement colleagues and pursue allegations of violations of the False Claims Act in carrying out our important public service.”

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Maurice Shoe, the co-owner of Joined. The Act permits private parties to sue on behalf of the government for false claims and to receive a share of any recovery. Mr. Shoe will receive $45,000.

This matter was investigated by the U.S. Attorney’s Office for the District of South Carolina and the Civil Division’s Commercial Litigation Branch. Investigative assistance was provided by the Office of Inspector General of the Department of Education.

The claims resolved by the settlement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Shoe v. Oral Roberts University, No. 6:16-cv-01570 (D.S.C.).