A lawsuit filed this month in San Diego, Calif. alleges DeVry University Inc. leadership in the city bribed students and sought ways to work around federal laws meant to regulate for-profit colleges.
Attorneys for Karinna Topete, a former manager at DeVry in California, claim she witnessed school officials violating internal company policies, as well as state and federal laws and regulations and that she was a victim of sexual harassment.
The lawsuit argues the DeVry campus' leadership would issue bonuses to admissions counselors who exceeded enrollment quotas, and that officials would "bribe" students -- in one instance, providing gift cards -- in exchange for positive performance reviews from students, according to court documents.
For-profit colleges have been increasingly regulated by the Obama administration in an attempt to reform the "bad actors." Recent investigations by the U.S. Senate and Government Accountability Office found widespread deceptive recruiting practices by many of the largest for-profit schools. In 2012, Sen. Tom Harkin (D-Iowa) listed DeVry along with other schools as companies that had "very serious shortcomings in the past" but are making improvements.
Topete alleges DeVry officials sought to evade federal regulations by sending admissions employees to community college transfer fairs to pressure enrolled students to sign up for classes at the for-profit institute. She also claims in the lawsuit that the DeVry Director of Admissions ordered her not to provide "informational materials or referrals to persons of Iraqi national origin or Middle-Eastern appearance."
According to the U.S. Department of Education, DeVry received just shy of $1.3 billion in taxpayer dollars through federal student aid in 2010-11, the most recent year data is available.
Topete's lawsuit claims she was a victim of sexual harassment too, accusing her former supervisor James Rodisch of flirting and making suggestive comments to her, and at one point instructing Topete to attend an event because DeVry needed a "hot bodied chick" at the event.
A spokesperson for DeVry said university administrators "cannot comment on pending legal matters."
Topete worked at DeVry from 2007 to 2012, when she was terminated for what she believes was retaliation for reporting the alleged unlawful conduct to human resources. She is seeking payment for lost earnings and to cover medical expenses as a result of mental and emotional injuries, and is demanding a jury trial.