Kentucky Attorney General Jack Conway took action Tuesday against a second for-profit college, alleging that it defrauded government tuition-assistance programs by illegally paying recruiters based on the number of students they enrolled.
Conway joined a whistle-blower lawsuit in federal district court in Pennsylvania against Education Management Corp., the parent company of Brown Mackie College, which has Kentucky campuses in Louisville, Hopkinsville and Fort Mitchell. The U.S. Justice Department and four other states also have joined the suit.
"This type of practice puts both students and taxpayers at risk," Conway said in a statement. "Overaggressive recruiters increase the likelihood that unqualified students are unable to complete their education and unable to repay their loans, which leaves taxpayers footing the bill."
The company, based in Pittsburgh, denied wrongdoing.
"The pursuit of this legal action by the federal government and a handful of states is flat-out wrong. EDMC's 2003 compensation plan followed the law in both its design and implementation, as EDMC's response to the governments' complaint will show," the company said in a statement.
Brown Mackie College's Web site says the company has 27 campuses in 15 states.
Two weeks ago, Conway sued another for-profit college, Owensboro-based Daymar College, alleging multiple violations of the state's Consumer Protection Act. Conway has an open investigation into the for-profit education industry in Kentucky.