Monday, educational service provider Apollo Group, Inc. (APOL: Quote) revealed an agreement with the U.S. Government, through the U.S. Attorney's Office for the Eastern District of California and the U.S. Department of Justice on behalf of the U.S. Department of Education, and two private plaintiffs, in settlement of the False Claims Act lawsuit filed in 2003 against its subsidiary University of Phoenix.
The terms of the agreement indicates Apollo Group will pay $67.5 million to the United States, while a a separate agreement provides $11 million in attorneys fees to the plaintiffs.
"This agreement not only brings closure to a long-running dispute and enables the Company to avoid the uncertainty and further expense associated with protracted litigation, it opens the door for a more constructive partnership with our lead regulator, the U.S. Department of Education," said Charles Edelstein, co-chief executive officer of Apollo Group.
The company said that although a party to the agreement, the U.S. Department of Justice at no time intervened in the lawsuit, which was pursued by the two private plaintiffs on behalf of the government.
According to the company, the agreement makes clear that it does not acknowledge, admit or concede any liability, wrongdoing, noncompliance or violation as a result of the settlement. Apollo said it was confident that it will not face any further civil or administrative exposure relating to its compliance with the Higher Education Act provision pertaining to incentive compensation for the period of March 1997 through the present as a result of settlement.
The company believes "that the compensation practices and programs of University of Phoenix have always complied fully with applicable federal laws and regulations, the regulations at issue in this case were unclear and inconsistent and, even after they were clarified by Safe Harbor provisions, involved complex judgments and interpretations.
APOL is currently trading at $61.39, up $4.86 or 8.61%, on the Nasdaq.
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by RTT Staff Writer
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