OIG: Office of Inspector General
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Investigation Report


District of Vermont

December 21, 2012

United States and Norwich University Settle Allegations of Fraud in Student Aid

The Office of the United States Attorney for the District of Vermont stated today that it has settled a potential False Claims Act matter involving student aid requested by Norwich University for a number of its students. The settlement includes the payment of $1,281,168 to the Government by the University.

The Government's investigation arose in 2008 following an audit by the U.S. Department of Education's Federal Student Aid Division. During the course of that audit, it became clear that a high ranking officer of the University, who has since been dismissed by the University, had been instructing students to assert that they were independent of their parents, even when they were not. While the University does not admit that it approved or authorized the misconduct, the practice greatly increased the amounts of student aid available to those students, which aid was immediately used to pay tuition at Norwich.

The Government's investigation focused on three school years, ending in the 2006-2007 school year. When the audit disclosed the problem, Norwich repaid those amounts which were open for the last period of time in which the improper aid was available. While Norwich has been extremely cooperative since the audit disclosed the problem, the Government believes that the matter must be treated as one involving fraud. While Norwich does not admit to any institutional fraud, it acknowledges that its students did receive a significant amount of federal aid to which they were not entitled, as a result of Norwich's actions, and Norwich and the United States have settled to avoid the burden, expense and risks inherent in litigation and a trial. The Government acknowledges that Norwich has made significant internal changes since 2008 to limit the possibility of similar misconduct in the future.

This matter was investigated by the United States Attorney's Office, the Department of Education's Office of Inspector General, and the Department of Education's Federal Student Aid Division. The United States was represented during the investigation by Assistant United States Attorney James Gelber. Norwich University was represented by Pietro Lynn of Lynn, Lynn &Blackman, P.C. of Burlington, VT.

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Last Modified: 01/07/2013