Caldwell University in Essex County has agreed to pay the United States more than $4.8 million to resolve its role in a scheme to defraud a federal education benefit program for veterans, U.S. Attorney Craig Carpenito announced Friday.
“Caldwell University tried to hoodwink the Department of Veterans Affairs and, worse, veterans themselves, by claiming to offer online classes developed and provided by Caldwell that were in fact marked-up offerings by an online correspondence school,” Carpenito said in a statement. “Our veterans should never be treated this way, and we will continue to work to ensure that they receive all of the benefits that they deserve as a result of their service to the country.”
Under a deal marketed by Ed4Mil, a Pennsylvania-based company, veterans could use their Post-9/11 GI Bill tuition benefits to enroll in online courses offered by Caldwell, authorities said. The bill was designed specifically to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001.
The online classes were not offered by Caldwell University or taught by the university’s staff, according to court documents. Instead, they were low-cost correspondence courses that were not eligible for the GI Bill.
But Caldwell University submitted false claims for payment for the courses to the U.S. Department of Veterans Affairs from Jan. 1, 2011 through Aug. 8, 2013, Carpenito said. The agency administers the Post 9/11 GI Bill.
Three people previously pleaded guilty to charges of conspiracy to commit wire fraud related to the scheme, federal prosecutors said.
Lisa DiBisceglie, the former associate dean of the office of external partnerships at Caldwell, and Helen Sechrist, a former employee of Ed4Mil, pleaded guilty in 2017 in federal court in Newark to one count of conspiracy to commit wire fraud.
The women’s guilty pleas followed the indictment of David Alvey, 40, of Harrisburg, Pennsylvania, the founder and president of Ed4Mil, one year earlier.
Alvey was sentenced on June 4, 2018, to five years in prison and DiBisceglie and Sechrist were each sentenced on June 5, 2018, to three years of probation, according to the statement. The trio were also ordered to pay $24 million in restitution.
Ed4Mil falsely claimed on government applications that the classes offered to the veterans were approved Caldwell classes and not correspondence courses taught by an online company, according to court documents.
The government was charged between $4,500 and $26,000 per course, instead of the $600 to $1,000 per course the correspondence company charged for the same classes, federal prosecutors said.
The $24 million in tuition benefits collected through the GI Bill was allegedly paid to Caldwell University, which then turned over between 85 percent and 90 percent of the money to Ed4Mil, according to court documents.
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