A federal judge has refused to dismiss a multi-billion dollar lawsuit brought by former employees and the federal government against one of the nation's largest for-profit education companies. The lawsuit against Pittsburgh-based Education Management Corp. (EDMC) alleges that the company illegally paid its admissions personnel based on the number of students that they each enrolled. The lawsuit, pending in federal district court in Pittsburgh, was filed in 2007 by former employees under a federal whistleblowing statute and joined in 2007 by the U.S. Department of Justice. In a ruling issued on May 5, federal district judge Terrence F. McVerry denied EDMC's request that the case be dismissed. Judge McVerry's decision was reported in the Pittsburgh Post-Gazette. "To put it starkly, plaintiffs allege a coordinated, multibillion-dollar corporate-wide fraud," U.S. District Judge Terrence F. McVerry wrote in the decision. "The fact that EDMC’s paperwork and salary database appear to be compliant [with federal law], on its face, is entirely consistent with Plaintiffs’ theory of the case." "What EDMC portrays as 'getting behind the numbers' may really be only manipulation of its numbers," the judge wrote. EDMC denies any wrongdoing and says it will continue to vigorously defend the lawsuit.
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