Feds Say ATI's For-Profit Colleges Created Fake Jobs, Companies to Rip Off Students and the Government

ATI's beautiful Maple Avenue campus.
ATI's beautiful Maple Avenue campus.
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ATI Career Training Center is the type of school you see advertised on daytime TV. It prepares its graduates for "rewarding careers" in "fields such as health care, personal fitness and wellness, business technology, information technology, automotive repair, air conditioning and refrigeration repair, and welding," per its website.

Three years ago, a handful of former employees sued North Richland Hills-based ATI Enterprises, which operates three campuses in North Texas and others in Oklahoma, Florida, and New Mexico. They said the school over-promised, lying to prospective students -- and the Texas Workforce Commission -- about their job prospects upon graduating and goosing enrollment to receive federal aid.

In a complaint unsealed yesterday, the U.S. Department of Justice agreed, alleging that ATI "engaged in a widespread scheme to defraud the Department of Education and the Texas Workforce Commission ... in order to receive federal funding it would not otherwise have been entitled to receive."

Also, according to the complaint, the schools sucked. Classes were overcrowded, the buildings were falling apart, police coverage was required during school hours because "students at ATI were also sometimes violent towards each other, instructors, and staff."

Trying to recruit homeless people as students isn't illegal, per se, but giving out gift cards was. So was other stuff, like the alleged lies about job placement, was since it violated the federal False Claims Act.

The lies, the government says, were myriad. They told convicted felons they would have no trouble getting a job and told dropouts their student loans would be forgiven if they returned to school. They fabricated a number of diplomas from DISD for high school dropouts ineligible for student aid. Unsurprisingly, several defaulted on their student loans.

Basically, the feds allege, the school was focused on increasing admissions and, by extension, profits, above all else.

In furtherance of that strategy, ATI employed an army of Admissions Representatives and put intense pressure on them to enroll as many students as possible. Admissions Representatives went to great lengths to recruit bodies. They would recruit new students at prisons, parole meetings, homeless shelters, and the Salvation Army. They would induce students to enroll at ATI with promises of gift cards, bus basses, and, in some cases, even housing.

To further goose placement numbers, the school allegedly made fake business cards created to place in students' files. Some were employed as janitors for a day pass graduation to be listed as placed. The school created fake companies at which they said graduates worked when they actually didn't. Also:

Several students who graduated in business administration and worked as cashiers were improperly counted as placed in their field of study because they worked with money. Fore example, one ATI employee counted as "placed" a business administration graduate who worked at at Dollar General. ... Another student with a welding diploma, NF, was counted as placed in his field while working as a manager at a Braum's Ice Cream Shop because he once repaired a machine in the shop by welding parts.

Between 2005 and 2012, students enrolled at ATI's campuses received more than $236 million in federal aid. The government's complaint doesn't specify how much of that is believed to have been obtained fraudulently, other than saying the figure is in the millions. Working on getting a hold of someone with the school, but no luck so far.

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