Apollo Group Settles University of Phoenix False Claims Act Case

Apollo Group, Inc. (NASDAQ: APOL) today announced that it has entered into an agreement with the United States of America, acting through the U.S. Attorney’s Office for the Eastern District of California and the U.S. Department of Justice on behalf of the U.S. Department of Education, and with two private plaintiffs to resolve the False Claims Act lawsuit filed in 2003 against subsidiary University of Phoenix, United States of America ex rel. Mary Hendow and Julie Albertson v. University of Phoenix. Although a party to the agreement, the U.S. Department of Justice at no time intervened in the lawsuit, which was pursued by the two private plaintiffs as a qui tam action on behalf of the government. Under the terms of the agreement, the Company will pay $67.5 million to the United States. A separate agreement provides for the payment by the Company of $11 million in attorneys fees to the plaintiffs, as required by the False Claims Act.

“This agreement not only brings closure to a long-running dispute and enables the Company to avoid the uncertainty and further expense associated with protracted litigation, it opens the door for a more constructive partnership with our lead regulator, the U.S. Department of Education,” said Charles B. Edelstein, co-chief executive officer of Apollo Group.