June 5, 2019 / 6:33 PM / 13 days ago

UPDATE 1-Oral Roberts University settles U.S. claim it violated admissions incentive ban

(Adds Oral Roberts statement, details about related settlement by another school, PIX available)

By Jonathan Stempel

June 5 (Reuters) - Oral Roberts University agreed to pay $303,502 to resolve allegations it illegally compensated a recruiter with a share of tuition the school received by enrolling recruited students, the U.S. Department of Justice said on Wednesday.

The settlement resolves whistleblower allegations under the federal False Claims Act that payments the private evangelical Christian university made to the recruiter Joined Inc violated a federal ban on incentive compensation.

Oral Roberts was accused of violating Title IV of the Higher Education Act, which bars colleges receiving federal student aid from compensating recruiters based on their success in enrolling students, through its dealings with Joined from 2014 to 2016.

The lawsuit had been filed in 2016 by Maurice “Buddy” Shoe, the president of Joined and a minority owner, in the federal court in Greenville, South Carolina.

“Our higher education system should prioritize the educational interests of students, not the financial interests of schools and recruiters,” U.S. Attorney Sherri Lydon in South Carolina said in a statement.

Oral Roberts denied wrongdoing in agreeing to the settlement, which includes $151,751 in restitution.

The Tulsa, Oklahoma-based school said it settled to avoid litigation costs, and the distraction from its mission to “develop Holy Spirit-empowered leaders through whole person education to impact the world.”

It also said it never submitted a false claim or misused federal taxpayer funds, and “only reimbursed Joined a portion of the actual costs it incurred in performing the agreement.”

The settlement is separate from the national scandal in which wealthy parents were accused of paying five- to seven-figure sums to gain their children’s admission to prestigious colleges.

Shoe said he sued after learning that Joined had illegal relationships with South Carolina’s North Greenville University, which settled for $2.5 million in February, and other schools.

He was awarded $45,525 from the Oral Roberts settlement, and $375,000 from the North Greenville settlement.

The False Claims Act lets whistleblowers sue on behalf of the federal government, and share in recoveries. (Reporting by Jonathan Stempel in New York; editing by Bill Berkrot)

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