fraud alert

Suit: Princeton Review charged city for tutoring it didn't provide

This chart from the Justice Department's lawsuit against Princeton Review shows how many times the company billed the city for tutoring students who were absent or when school was closed — and how much it was paid. (Click to enlarge)

A company hired to provide tutoring services in New York City bilked the city out of millions of dollars in federal funding for poor students, according to the U.S. Justice Department.

The department today filed a civil fraud lawsuit against The Princeton Review, Inc., alleging that the company had gotten the city to reimburse it for tutoring it had not provided. According to the suit, the company’s fraudulent claims continued even after a city investigation — never made public — turned up misconduct in 2006.

The tutoring program, known as “supplemental education services” and mandated for low-performing students in high-needs under the No Child Left Behind law, reimbursed providers based on the number of students they served. Princeton Review documented how many students it had tutored by turning in signed attendance sheets; it also gave bonuses to supervisors of tutoring sites where attendance was high. One of those supervisors, Ana Azocar, is also named in the lawsuit.

The bonus system incentivized fraud, according to the suit. Investigators found that many of the signatures showing student attendance were falsified — and sometimes names were even misspelled. The company sought reimbursement for tutoring students who were out of the country and holding sessions when schools were closed, according to the suit. At one school, the now-closed M.S. 399 in the Bronx, the company said it had tutored 74 students on New Year’s Day.

“The Princeton Review and its employees were supposed to tutor needy students, not cheat a federal program,” said Preet Bharara, U.S. Attorney for the Southern District, in a statement. “As alleged, the company and certain of its employees forged student signatures, falsified sign-in sheets, and provided false certifications in order to deceitfully profit from a well-meaning program.”

The complaint covers the years 2006 to 2010 but notes that the city’s own investigator, Special Commission of Investigation Richard Condon, had scrutinized the program’s records from before that in 2006. That year, Condon released two separate reports detailing improprieties by a number of tutoring providers — but neither named Princeton Review. Only a small fraction of SCI investigations are ever released.

A Department of Education spokesman said today that Condon’s office had referred the current allegations to Bharara’s office.

Princeton Review had a contract with the city to provide SES tutoring from 2002 until 2010, when it closed its SES division. The company is not currently a citywide vendor, but some schools have hired the company to provide preparation for standardized tests such as the SAT. More than 100 other companies are approved to offer SES tutoring to city students, and the number of eligible students grew this year as more schools failed to hit federal accountability benchmarks.

A spokesperson for Princeton Review did not deny the allegations but said that the alleged improprieties are part of the company’s past.

“The activity allegedly occurred within the company’s former Supplemental Educational Services division, which the company discontinued in 2010,” said the spokesperson. “No former SES employees or executives are with the company today, and current management — most of whom joined the company after the division was shuttered — had no involvement or role in the affairs of SES.  We are working closely with the U.S. Attorney’s office to resolve this matter expeditiously.”

The Justice Department’s press release about the suit is below, followed by the complaint filed today in Manhattan Federal Court.

JUSTICE DEPARTMENT SUES PRINCETON REVIEW

FOR CLAIMING REIMBURSEMENT FOR TUTORING SERVICES IT DID NOT PROVIDE

NEW YORK – The United States has filed a civil fraud lawsuit against The Princeton Review Inc., a leading provider of educational products and services, and Ana Azocar, a former employee at the company, for Princeton Review’s repeated submission of false claims for reimbursement in connection with a federally-funded program to provide tutoring services to underprivileged children in New York City, Preet Bharara, U.S. Attorney for the Southern District of New York, and Brian M. Hickey, Special Agent-in-Charge of the Northeastern Region of the U.S. Department of Education’s Office of Inspector General (ED-OIG), announced today.  As a result, Princeton Review received millions of dollars in federal funds for tutoring services that it did not provide.  The lawsuit seeks treble damages and civil penalties under the False Claims Act for the fraudulent reimbursement claims submitted by Princeton Review.

U.S. Attorney Bharara said, “The Princeton Review and its employees were supposed to tutor needy students, not cheat a federal program.  As alleged, the company and certain of its employees forged student signatures, falsified sign-in sheets, and provided false certifications in order to deceitfully profit from a well-meaning program.  As today’s suit demonstrates, this type of fraud will not be tolerated.”

ED-OIG Special Agent-in-Charge Hickey said, “The Supplemental Education Services program provides critical resources for deserving students who seek to improve their academic performance.  Today’s actions allege that Princeton Review billed and retained SES payments for students it did not tutor.  That is unacceptable.  Tracking down those who would cheat this important program is a priority of our office.”

As alleged in the complaint filed today in Manhattan Federal Court:

From 2002 to 2010, Princeton Review participated in a federally-funded program under which it provided Supplemental Educational Services (SES) – specifically, after-school tutoring – to underprivileged students attending underperforming schools in New York City.  Under the program, Princeton Review was paid a fixed amount of money per hour for each student it tutored by the New York City Department of Education (NYC DOE), with funds provided to New York state by the federal government.  The allegations in the complaint relate exclusively to Princeton Review’s provision of SES tutoring in New York City from 2006 to 2010.  Princeton Review exited the SES business in 2010.

At each of its tutoring classes, Princeton Review had students sign in and out on an attendance form.  The company was required to keep a daily attendance record as a condition of getting paid.  However, many of Princeton Review’s site managers — employees who oversaw the day-to-day operations of its New York City SES program — routinely falsified entries on the daily student attendance forms to make it appear as though more students had attended tutoring classes than had in fact attended.  Azocar and other supervisors (called “directors”) used threats of termination and pay cuts to pressure site managers to maintain high daily student attendance.  Azocar also instructed and/or encouraged some site managers to falsify entries on the attendance forms, including by signing in for absent students.

From 2006 to 2010, Princeton Review’s daily student attendance forms and invoices were replete with falsifications such as:

  • Entries were changed to indicate that students were present after the students were initially marked as absent.  In some of these instances, the students’ signatures were obvious forgeries because the students’ own names were misspelled.  On one attendance form, a student named Dontae was signed in as “Donate.”
  • Students were signed in as present on days when their parents later confirmed they were absent.  For example, one student was in Mexico on a family vacation on four days when the student’s purported signature appears on daily student attendance forms.  Another student was signed in as present on three days when in fact a note from the student’s doctor shows that the student was home from school recuperating from surgery.
  • Princeton Review was paid for tutoring students on days when records from the NYC DOE show that the students were absent from school or school was closed.  For example, Princeton Review billed the NYC DOE for tutoring 74 students at MS 399 in the Bronx on New Year’s Day in 2008, when there were no SES classes due to the holiday.

Furthermore, Princeton Review maintained an incentive compensation system that encouraged the falsification of attendance records.  Specifically, the company paid directors substantial bonuses if the site managers they supervised consistently reported high daily student attendance.  For example, Princeton Review paid Azocar bonuses of $9,600 and $6,600 in 2008 and 2009, respectively, because the site managers she supervised consistently reported high daily student attendance.

For each invoice that Princeton Review submitted to the NYC DOE for its purported tutoring, Princeton Review certified that the information on the invoice was “true and accurate.”  Despite these certifications, most, if not all, of the monthly invoices contained false information, and the invoices billed the NYC DOE for thousands of hours of tutoring services that Princeton Review never actually provided.  As a result of these false monthly invoices, the NYC DOE paid Princeton Review millions of dollars in federal funds for tutoring services that it never in fact provided.

The complaint further alleges that Princeton Review management had previously been made aware of similar misconduct in the company’s New York City SES program, but failed to take adequate corrective action.  Specifically, in 2006, the Special Commissioner of Investigation for the New York City School District investigated whether Princeton Review had overbilled the NYC DOE for SES tutoring during the 2005-2006 academic year (the academic year immediately preceding the years at issue in this suit).  Although the company hired an outside law firm to conduct an internal investigation and implemented certain compliance measures, the company failed to implement adequate corrective action, as evidenced by the fact that the company’s compliance officers routinely approved attendance forms with clear signs of fraud.  Moreover, in 2008, a Princeton Review manager was told that Azocar had instructed a site manager to forge student signatures, but the manager failed to investigate the matter adequately and allowed Azocar to keep her job.  As a result of Princeton Review’s failure to deter or detect fraud, the fraud continued.

By filing its complaint, the government joined a private whistleblower lawsuit that had previously been filed against Princeton Review under the False Claims Act.

U.S. Attorney Bharara thanked the ED-OIG for its extraordinary assistance in this case.

The case is being handled by Assistant U.S. Attorney Christopher B. Harwood from the U.S. Attorney’s Office for the Southern District of New York’s Civil Frauds Unit.

The Civil Frauds Unit works in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Princeton Review Complaint

survey says

More bullying reported at New York City schools, study shows

PHOTO: Anthony Lanzilote

More New York City students say there is bullying in their schools, a report released Monday showed. The findings also revealed that many schools reporting the greatest number of violent incidents on campus have no social workers on staff.

The report was commissioned by New York City Comptroller Scott Stringer.

Stringer also released an audit of how school safety matters are recorded, and concluded that the education department should provide more oversight and streamline incident reporting rules.

“The audit found clear breakdowns in communication in the reporting and tracking of incidents and actions taken,” according to a press release from Stringer’s office.

The education department disputed some of the comptroller’s findings, and in a written statement, spokeswoman Miranda Barbot wrote: “We have detailed protocols in place to ensure allegations of bullying are immediately reported, investigated and addressed, and are investing in both anti-bullying initiatives and mental health supports.”

But the pair of reports raises scrutiny of Mayor Bill de Blasio’s school discipline reforms, which favor  “restorative” practices that emphasize mediation over punishment, and make it harder to suspend students.

Advocates of the de Blasio reforms say the shift is necessary because black and Hispanic students are more likely to be arrested or disciplined at school. Research has shown such disciplinary action can lead to higher dropout rates. Critics of the reforms, meanwhile, say the changes have created more chaotic schools.

The findings are also likely to add to a chorus of parents and elected officials who say more emotional supports are needed for the city’s most vulnerable students. Students who experience a mental health crisis during the school day may be handcuffed and shuttled to hospitals. The city’s latest budget, which was approved last week, includes an additional $2 million to hire social workers and guidance counselors in schools that currently don’t have any.

Here are some highlights from the reports.

More students report there is bullying in their schools — but the data comes with a catch.

Last year, the education department’s annual survey showed that 82 percent of students said their peers “harass, bully, or intimidate others in school.” That’s up year over year, and up significantly from 65 percent of students in 2012, which was the lowest rate recorded since at least 2010. (De Blasio’s discipline reforms started to take effect around 2015.)

A note about these numbers: Prior to 2017, the survey asked whether students harass, bully or intimidate other students none, some, most, or all of the time. The most recent survey responses were slightly different: none of the time, rarely, some of the time, or most of the time — a change that may have artificially inflated the bullying numbers.

That’s enough to render the survey data unreliable said Max Eden, a researcher who has studied school climate for the conservative-leaning Manhattan Institute — a critic of the mayor’s discipline reforms. Still, taken with other findings, it’s reasonable to think that bullying is on the rise at city schools, he said.

Among the other evidence: A first-of-its-kind report, released this month under a new city law, that showed substantiated bullying incidents are on track to increase this year.

Schools that log the most violent incidents often lack mental health supports.

Guidance counselors and social workers are key when it comes to creating safe schools because they can help address the root cause of violent or troublesome behavior, advocates who want more mental health supports say.

But many of the city’s neediest schools go without that help.

Of the schools reporting the most violent incidents on campus, 36 percent lack a full-time social worker, the comptroller found. On campuses where there are social workers, caseloads are a staggering 700 to one. That far exceeds the recommended ratio from the National Association of Social Workers of 250 general education students per social worker — and it’s higher than the citywide average of 612 students per social worker, according to the comptroller.

The comptroller’ compares that to the ratio of New York Police Department school safety agents who are placed in schools: There is one safety agent per 228 students, according to the report.

“Our city is failing to meet the social and emotional needs of our students,” Councilman Mark Treyger, of Brooklyn, who has pushed the city to report more up-to-date bullying data and to hire more school counselors, said in an emailed statement.

Schools may be underreporting violent incidents, something the education department disputes.

In a separate audit, the comptroller compared logs kept by school safety agents to incident reports filed by school leaders. In 21 percent of cases, incidents that were noted by safety agents were not reflected in the school reports.

The school data, in turn, are used to report incidents to the state for its Violent and Disruptive Incident Report, or VADIR. The discrepancy could raise questions about the already-controversial reporting system. (VADIR has been criticized for classifying schoolyard incidents as serious offenses, and the state has tweaked its definitions in response to those kinds of concerns.)

This finding also comes with some caveats. The comptroller looked at only 10 schools — a tiny sample of the city’s portfolio of about 1,800. And the education department took issue with the methodology.

In its response to the audit, education department officials said that the police data doesn’t align with the state’s reporting categories, and that the information may not be comparable because of student privacy concerns and recordkeeping issues on campuses where multiple schools share a building.  

Student Voice

Boasting impressive resumes, five Newark students compete for a school board seat

PHOTO: Newark Public Schools
Top row: Amanda Amponsah, Nailah Cornish, Andre Ferreira. Bottom row: Shalom Jimoh, Emmanuel Ogbonnaya.

Earlier this year, Newark residents elected three new members to the city’s re-empowered school board. Now, public school students can choose one of their own to join the board, which in February became the district’s governing body for the first time in more than two decades.

Students have until midnight on Tuesday, June 5, to vote online for a rising 12th-grader to represent their interests on the school board. The winning student representative will provide the board with student perspectives on district policy, but will not be permitted to vote.

Eligible candidates are required to have a minimum 3.0 grade-point average, a satisfactory disciplinary record, and to submit peer and faculty recommendations. Last week, the five candidates participated in a debate, which can be heard here.

The candidates are:

  • Amanda Amponsah, of University High School, who is class president, captain of the softball team, a member of the marching band, and an aspiring pediatric oncologist.
  • Nailah Cornish, of Barringer Academy of Arts and Humanities, who plays basketball and volleyball, runs her own modeling program, and plans to study law and business in college.
  • Andre Ferreira, of Science Park High School, who is a soccer player, debater, and vice president of the student leadership organization. He plans to major in political science and aspires to work for the United Nations.
  • Shalom Jimoh, of Weequahic High School, who immigrated from Nigeria, and is now a member of the student government council, the National Honor Society, and the track and volleyball teams. She plans to study medicine and theater arts in college.
  • Emmanuel Ogbonnaya, of Weequahic High School, who serves as school photographer, soccer team captain, and is a member of the National Honor Society. Emmanuel wants to study engineering, and then start a company that combines photography, architecture, and engineering.

The winner will join the board at an historic moment. Control of the district reverted to the city in February, when state officials determined the district had met its requirements for home rule. The district had been run by the state for 22 years prior.

Last year, more than 1,200 students  — or about 13 percent of Newark public high school students — voted for a student representative to the school board, which then functioned in an advisory capacity only. This year, a Newark student group tried to ramp up turnout with text messages and a video posted on Facebook encouraging voting.

“The student representative will work closely with administrators and board members to make sure that all student voices are heard,” according to a video produced in advance of the vote by the Youth Media Symposium at the Abbott Leadership Institute, a Newark civic-engagement group. “Now that we have local control, this is more crucial than ever.”

As of 4 p.m. Tuesday, 1,381 votes had been cast. District officials said the winner will be announced Friday, and will be introduced publicly at the board’s June 12 meeting. The representative will then be required to attend at least four board meetings and various district events during the 2018–2019 academic year.