Archive for Lawsuits

ARE ANNUAL TUITION INCREASES AT YAVAPAI COMMUNITY COLLEGE CONSTITUTIONAL?

Does Attorney General Brnovich’s lawsuit against Arizona Board of Regents for not adhering to a State constitutional requirement that tuition for residents attending state universities be “nearly as free as possible” raise legal issues for Yavapai?

On September 8 Attorney General Mark Brnovich filed a complaint against the Arizona Board of Regents claiming board members have “dramatically and unconstitutionally’’ increased the cost of going to one of the state’s three universities.  He argued that Arizona’s Constitution, article XI, § 6 was violated.  It states that “The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible.”

Does the fact that student tuition at Yavapai Community College is specifically used to pay off revenue bonds that were sold to renovate the student residence halls violate that Amendment?  After all, the Governing Board could have asked voters to approve a General Obligation Bond to pay for renovation rather than put the debt on the shoulders of student tuition.

Does the fact that over the past ten years the Governing Board has increased tuition in some form at a rate far above inflation while spending an estimated $100 million on capital projects, using money paid from primary taxes for those projects, rather than applying those funds to keep tuition low, violate the State Constitution? After all, the Governing Board could have sought voter approval via General Obligation Bonds to pay for those expensive projects.

Does the fact that tier 2 courses cost double what they cost ten years ago or that in some alleged “market based courses” students pay over $500 per credit hour violate the Constitutional provision to keep tuition as “nearly free as possible”?

Maybe this lawsuit will bring about some answers to those questions.  Maybe the Yavapai Community College District Governing Board might even discuss this issue—but probably not.  The Blog assumes the Board with Deb McCasland most likely dissenting will push through another tuition increase in excess of inflation in February or March 2018 while continuing to spend millions on capital projects using primary tax money rather than ask voters to approve General Obligation Bonds for the projects.  After all, given its history, does anyone really believe there will be a serious attempt by the Yavapai Community College Governing Board to keep tuition as “nearly free as possible?”  

BOARD MUM ON HAMILTON MULTI-MILLION DOLLAR LAWSUIT

College loses motions in federal court; whistle-blower lawsuit on way to jury

The District Governing Board went into executive session February 14, 2017 to apparently discuss the Hamilton v. Yavapai College multi-million-dollar lawsuit.  Following the closed session, there was no comment on what, if anything, was discussed. The dispute is now headed for trial on the whistleblower’s claims. Here are the details that you will only find in the Blog.

 Federal judge Murray Snow ruled in December, 2016 that a second whistle-blower case against the Yavapai College flight program will proceed.  The case alleges that Yavapai College’s airplane pilot program took millions of dollars from the VA by submitting false claims for veteran education benefits while knowingly violating the VA’s enrollment limitations. 

The Complaint was filed by the former director of aviation programs at Yavapai College, Dan Hamilton, and alleges that Yavapai College and its airplane program partner, NorthAire Aviation, violated the Veteran’s Administration funding rule that limits VA beneficiary enrollment to 85% in any program.  (In other words, the program must have at least 15% of its enrollees as civilians.)

The Complaint alleges schemes wherein NorthAire improperly paid for students whom the program certified were not receiving any institutional aid and that the program improperly counted students who were not in the airplane program including part-time, non-flight training, high school students for whom YC waived tuition.  The 85% enrollment limitation is the VA’s safeguard to guarantee that the programs have real world relevance, demand and market driven pricing. 

In an earlier ruling on December 6, 2016, Judge Murray Snow denied a motion to dismiss filed by Yavapai College’s partner NorthAire.  NorthAire argued that as a mere contractor with the College who did not, itself, submit the claims or certifications to the VA, it could not be held liable for the program’s fraud. 

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Second whistleblower case against Yavapai College flight program going to jury

The case alleges Yavapai College’s airplane pilot program took millions of dollars from the VA by submitting false claims for veteran education benefits

A federal judge has ruled that a second whistleblower case against a Yavapai College flight program will go forward.  The case alleges Yavapai College’s airplane pilot program took millions of dollars from the VA by submitting false claims for veteran education benefits while knowingly violating the VA’s enrollment limitations.  The Complaint was filed by the former director of aviation programs at YC, Dan Hamilton, and alleges that YC and its airplane program partner, NorthAire Aviation, violated the VA’s funding rule that limits VA beneficiary enrollment to 85% in any program.  The Complaint details schemes wherein NorthAire improperly paid for students whom the program certified were not receiving any institutional aid and that the program improperly counted students who were not in the airplane program including part-time, non-flight training, high school students for whom YC waived tuition.  The 85% enrollment limitation is the VA’s safeguard to guarantee that the programs have real world relevance, demand and market driven pricing. 

 In a ruling on December 6, 2016, the Judge Murray Snow denied a motion to dismiss filed by YC’s partner NorthAire.  NorthAire argued that as a mere contractor with YC who did not, itself, submit the claims or certifications to the VA, it could not be held liable for the program’s fraud.  The Court disagreed, holding that “liability extends to any person who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government.”  The Court found that Hamilton’s Complaint amply alleged details of how NorthAire knew the YC airplane program was violating VA regulations and thus defrauding the VA.  Indeed, the Court said Hamilton could proceed on his claim that NorthAire and YC conspired to defraud the VA.  The Court dismissed the alternative theory that the airplane program improperly retained overpayments finding that the Complaint alleged more than a mere retention of an overpayment.  “Rather, the Complaint alleges that the Defendants mislead the VA to receive funds that they did not have a right to.”  This ruling follows the Court’s earlier decision denying summary judgment in a case against YC’s Helicopter Program.  Both cases are now on proceeding toward trial.  Both expose the college, its partners and their agents to $10s of millions in damages. 

 Under the False Claims Act, the statute that allows whistleblowers to sue on behalf of the federal government, those who defraud the government must repay three times the amount they fraudulently took, plus penalties.  Whistleblowers, like Dan Hamilton, can recover up to 30% of any moneys obtained for the government under the False Claims Act. 

COLLEGE LOSES MOTION TO DISMISS IN FEDERAL COURT

Judge says Multi-million dollar lawsuit involving former head of aviation program to go to jury

The defendants in Daniel Hamilton’s $60 million dollar lawsuit against Yavapai College and some of its administrators must go to a jury trial, Federal District Judge G. Murray Snow ruled September 28 (Wednesday).  Recall that Mr. Hamilton is the former Yavapai College Director of Aviation Programs.

Hamilton is a professional aviator, a veteran and a decorated former F-16 fighter pilot who served as a captain in the U.S. Air Force from 1997 to 2007. He reportedly started his job with Yavapai College in Sept. 6, 2011, and was terminated on or about May 31, 2012.

vector scales of justice and gavel

According to Hamilton’s lawyer, “One of the educational programs under the Post 9/11 GI Bill is a helicopter flight training/degree program.” Among the requirements of the program is that no more than 85 percent of the students in the program can be funded by the VA or by the educational institution.  “No new VA benefits are paid when the computation establishes that the 85/15 ratio is not satisfied.” Mr. Hamilton’s lawsuit alleges that Yavapai College and Prescott-based Guidance Aviation fraudulently took tuition money for its aviation programs from the U.S. Veterans Administration’s Post-9/11 GI Bill, but did not comply with the program’s requirements. Along with the false claim allegations, Hamilton is also suing Yavapai College for wrongful termination under the False Claims Act whistleblower protection provisions and under state law.

In his order denying a request by the defendants that the lawsuit be dismissed, Judge Snow wrote that “[t]he Defendants were warned that the 85/15 ratio `applied to each program and each course’ containing veterans.”  He also observed that “Yavapai and Guidance had violated Regulation 4201 in the past.”

Judge Snow rejected the theory that JTED students could be counted in the 15% required by the Veterans Administration. In part he wrote:  “Notes from a meeting between Guidance, NorthAire, and Yavapai representatives in July of 2012 indicate that the Defendants had reason to know that `there is a statute stating we can’t count the JTED students as civilians because they are possibly counted in secondary, per the state.’”

The judge’s decision should drive Yavapai College to begin serious negotiations to settle the lawsuit.  A complete copy of Judge Snow’s order can be found by clicking on the following link. 414-order-on-dispositive-motions1815086

VA CRACKS DOWN ON AVIATION PROGRAM

BIG CHANGES IN YAVAPAI’S AVIATION OFFERINGS

The Veterans Administration has cracked down on Yavapai Community College and other institutions that have been offering helicopter and pilot training for veterans.  New regulations have been established that will help reduce what the VA considers overreaching by various educational institutions in the nation. Under the new regulations that went into effect August 1, 2016 students can no longer obtain a private pilot’s license essentially free as  part of Yavapai College’s aviation program.  Rather, all students must complete their private pilot training before they enter Yavapai College’s aviation program.

helicopter flight trainingThis regulatory development specifically impacts the Helicopter Operations and Airplane Operations concentrations of the Associate of Applied Science in Aviation Technology (AVT) degree at Yavapai College.  The private pilot applicable courses had to be removed from the two flight concentrations.

In addition, if a veteran in the helicopter emphasis wishes to fly anything other than an R-22 (the cheapest helicopter option), they will now be required to pay for it out of their own pocket. VA will no longer be paying for veterans to fly R-44’s or expensive turbine helicopters like the R-66 or Bell 206 Jet Ranger.

These changes have meant a loss of hundreds of thousands of dollar in tuition to the College. Recall the College was charging over $600 per credit for these courses; it has dropped it to $575 per credit for 2016-17.  

You can find additional information about the impact of the new VA regulations on the aviation program at Yavapai Community C0llege  by clicking here.

These changes were the result, at least in part, of investigations in 2015 into various flight schools and how much they were charging veterans for aviation training.  Yavapai College was prominent among those institutions. 

See also “U.S. taxpayers stuck with the tab as helicopter flight schools exploit GI Bill loophole,” by clicking here.

Hamilton v. Yavapai College before Federal District Judge Snow in Phoenix

COLLEGE UNABLE TO REACH AGREEMENT ON THE $60 MILLION DOLLAR LAWSUIT

The $60 million dollar lawsuit brought by the former Yavapai College Director of Aviation Programs, Daniel Hamilton, was transferred earlier this year to U.S. District Judge G. Murray Snow.   This is the same judge who recently ordered sweeping reforms over the Maricopa County Sheriff”s Office run by Joe Arpaio.

vector scales of justice and gavelThe assignment to Judge Snow may encourage the College to reach a settlement.

Recall that Hamilton is a professional aviator, a veteran and a decorated former F-16 fighter pilot who served as a captain in the U.S. Air Force from 1997 to 2007. He reportedly started his job with Yavapai College in Sept. 6, 2011, and was terminated on or about May 31, 2012.

The lawsuit focuses on the Yavapai Community College helicopter pilot training, which is offered through Guidance Aviation. According to Hamilton’s lawyer, “One of the educational programs under the Post 9/11 GI Bill is a helicopter flight training/degree program.” Among the requirements of the program is that no more than 85 percent of the students in the program can be funded by the VA or by the educational institution.  “No new VA benefits are paid when the computation establishes that the 85/15 ratio is not satisfied.” Mr. Hamilton’s lawsuit alleges that Yavapai College and Prescott-based Guidance Aviation fraudulently took tuition money for its aviation programs from the U.S. Veterans Administration’s Post-9/11 GI Bill, but did not comply with the program’s requirements. Along with the false claim allegations, Hamilton is also suing Yavapai College for wrongful termination under the False Claims Act whistleblower protection provisions and under state law.

Since the lawsuit was filed, the VA halted enrollment in the spring, 2015 in Yavapai College’s helicopter program. The program offered by Yavapai College,  along with Southern Utah University, was viewed as “one of most popular and expensive programs, which routinely charged more than $250,000 for a two-year course.”  See LA Times  story of June 27 by clicking here According to the Times, helicopter flight training companies were able to collect tens of millions of dollars a year through a loophole in the latest GI Bill “in part because officials didn’t enforce laws aimed at preventing abuse of veteran education benefits.” Click here for Times story. 

The VA sent a letter to the college in 2015 stating its aviation program did not meet the threshold of 15 percent of its enrollees being non-veterans. The GI bill states that any program it funds must be affordable enough that at least some students are willing to invest their own money, rather than being entirely funded by the federal government. All 90 students in the helicopter flight training program offered by Guidance Aviation through Yavapai are veterans, according to the letter. Helicopter training is the most expensive form of education paid for under the GI Bill. See March 23, 2015 Times story by clicking here.

The GI Bill  covers 36 months of tuition and fees for veterans in degree programs at public universities and colleges. It was thought, erroneously, that schools would act as natural allies in controlling costs. Instead, some schools have used their newfound ability to offer veterans all-expenses-covered training in costly helicopters as a recruiting tool.  

Yavapai College announced in May, 2016 that it was going to lose about a million dollars in tuition revenue in the 2016/17 fiscal year. The loss, according to the College, was the result in part of its inability to comply with the VA requirements. Enrollment in the aviation programs plummeted.

Note that the College charges persons in the helicopter program well over $500 per credit, rather than the $75 per credit it claims is the base tuition for courses.  Most of the fees and other costs associated with the aviation program are being paid by the American taxpayer via the Veterans Administration.  

The aviation program continues at Yavapai College but apparently now in compliance with the VA.

Are lawyers getting rich off whistleblower lawsuit?

Yavapai College has yet to announce a settlement; will taxpayers pay the costs? 

One has to wonder if the lawyers involved in the Hamilton v. Yavapai College whistleblowing lawsuit aren’t getting some pretty fat fees. Recall the Plaintiff Hamilton is the veteran who used to run the aviation program at Yavapai College and was fired. He then blew the whistle on the College and its failure to comply with Veterans Administration’s requirements regarding an 85/15 rule for Veterans. (Check out the lawsuit in the Blog index.) The lawsuit remains unsettled.

vector scales of justice and gavel

Listed below are the lawyers, their law firms, and the clients they represent. The Blog obtained the list from the Federal District Court order when the judge refused to dismiss a number of counts against the College. Amazing, isn’t it.
One also wonders whether there might be a conflict of interest when one firm represents several defendants in this lawsuit. Ummm?
Finally, who is paying for all this legal talent? Is it the taxpayers of Yavapai County? Wouldn’t it be nice if the College would send out that information?

Daniel Hamilton, Plaintiff, represented by Krista Michelle Carman, Warnock MacKinlay & Carman PLLC & Richard James Harris, Richard J Harris & Associates PC.
Yavapai Community College District, Defendant, represented by Elizabeth Ann Gilbert, Jones Skelton & Hochuli PLC.
Yavapai Community College District, Defendant, represented by Georgia A Staton, Jones Skelton & Hochuli PLC.
Yavapai Community College District, Defendant, represented by Steven Douglas Leach, Jones Skelton & Hochuli PLC.
Guidance Academy LLC, Defendant, represented by Dan W Goldfine, Snell & Wilmer LLP,Donald Charles Zavala, Jr., Boyle Pecharich Cline Whittington, James Michael Gottry, Snell & Wilmer LLP & Joshua Grabel, Snell & Wilmer LLP.
John L Stonecipher, Defendant, represented by Dan W Goldfine, Snell & Wilmer LLP,Donald Charles Zavala, Jr., Boyle Pecharich Cline Whittington, James Michael Gottry, Snell & Wilmer LLP & Joshua Grabel, Snell & Wilmer LLP.
Amanda Alsobrook, Defendant, represented by Dan W Goldfine, Snell & Wilmer LLP,Donald Charles Zavala, Jr., Boyle Pecharich Cline Whittington, James Michael Gottry, Snell & Wilmer LLP & Joshua Grabel, Snell & Wilmer LLP.
John Morgan, Defendant, represented by Donald Peder Johnsen, Gallagher & Kennedy PA, Georgia A Staton, Jones Skelton & Hochuli PLC & Steven Douglas Leach, Jones Skelton & Hochuli PLC.
John Morgan, named as: husband on second amended complaint, Defendant, represented by Jodi Renee Bohr, Gallagher & Kennedy PA.
April Morgan, Defendant, represented by Donald Peder Johnsen, Gallagher & Kennedy PA, Georgia A Staton, Jones Skelton & Hochuli PLC, Steven Douglas Leach, Jones Skelton & Hochuli PLC & Jodi Renee Bohr, Gallagher & Kennedy PA.
United States of America, Movant, represented by Lon R Leavitt, US Attorneys Office &Todd Frederick Lang, US Attorneys Office.

Wills’ claims strong economy and VA cause enrollment decline

Excuse for decline raises questions: Increased tution, closing of Camp Verde; attempt to close Sedona may also be factors

President Penelope Wills’ claims in a September letter to the faculty that the continued decline in enrollment at the College is attributable to the strong economy and the Veterans Administration crackdown on the aviation program.

According to Wills’ “enrollment is slightly down but when you consider the primary reason, the stronger economy, I can accept that!  Another major impact on our enrollment was the VA decision not to allow us to enroll veterans in our aviation programs (rotary and fixed wing.) We are working with our industry partners, North-Aire and Guidance, to enroll more civilians in these two programs so that we can satisfy the VA’s ruling of 85/15 (No more than 85% of any program can be comprised of veterans receiving benefits.)  We hope we will soon be able to announce a viable solution.”

Wills’ did not provide the percentage of enrollment drop in her letter, however, reliable sources indicate the drop this year is close to 5%.

The problem with the Wills’ analysis, which places the decline on the improved economy, doesn’t appear supported by historic enrollment data issued by the College as shown by the chart that appears below. 

Enrollment headcount only last ten years

Headcount figures show that with the exception of 2012/13, enrollment has steadily declined over the last 12 years under the Wills’ and Horton administrations regardless of the economy.  Wills’ took over in the fall, 2011; Horton in August, 2005. Enrollment is now at an all time low. In 2006/07 the headcount was 16,312 and there was no recession. It is about 5,000 students down today.

Wills’ also fails to recognize that Horton’s decision to close the Camp Verde facility in 2010 and her effort to close the Sedona Center are factors that have impacted the number of students seeking credit courses.  The increase in tuition likewise may have impacted enrollment.

A portion of the aviation program was closed down in March, 2014 because the College had failed to comply with Veterans’ Administration requirements.  A $60 million lawsuit is being litigated by the former director of the program who claims he was filed, which alleges among other things that he was fired because he complained about the failure to comply with VA regulations.Tuition 2015 table

 

 

 

Lawsuit by former Yavapai College Director of Aviation Programs Daniel Hamilton

Governing Board to review Hamilton’s 60 million dollar lawsuit in closed door session

The Yavapai Community College District Governing Board has scheduled a closed door session at its meeting on the Verde Campus in  Clarkdale on Tuesday afternoon to discuss the $60 million dollar lawsuit brought by the former Yavapai College Director of Aviation Programs Daniel Hamilton.   Hamilton is a professional aviator, a veteran and a decorated former F-16 fighter pilot who served as a captain in the U.S. Air Force from 1997 to 2007. He reportedly started his job with Yavapai College in Sept. 6, 2011, and was terminated on or about May 31, 2012.

The lawsuit focuses on the helicopter pilot training that Yavapai College offers through Guidance Aviation. According to Hamilton’s lawyer, “One of the educational programs under the Post 9/11 GI Bill is a helicopter flight training/degree program.” Among the requirements of the program is that no more than 85 percent of the students in the program can be funded by the VA or by the educational institution.  “No new VA benefits are paid when the computation establishes that the 85/15 ratio is not satisfied.” His lawsuit alleges that Yavapai College and Prescott-based Guidance Aviation fraudulently took tuition money from the U.S. Veterans Administration’s Post-9/11 GI Bill, but did not comply with the program’s requirements. Along with the false claim allegations, Hamilton is also suing Yavapai College for wrongful termination under the False Claims Act whistleblower protection provisions and under state law.

Since the lawsuit was filed, the VA halted enrollment in the spring, 2015 in Yavapai College’s helicopter program. The program offered by Yavapai College,  along with Southern Utah University, was viewed as “one of most popular and expensive programs, which routinely charged more than $250,000 for a two-year course.”  See LA Times  story of June 27 by clicking here According to the Times, helicopter flight training companies were able to collect tens of millions of dollars a year through a loophole in the latest GI Bill “in part because officials didn’t enforce laws aimed at preventing abuse of veteran education benefits.” Click here for Times story. 

The VA sent a letter to the college this spring stating that the program did not meet the threshold of 15 percent of its enrollees being non-veterans. The GI bill states that any program it funds must be affordable enough that at least some students are willing to invest their own money, rather than being entirely funded by the federal government. All 90 students in the helicopter flight training program offered by Guidance Aviation through Yavapai are veterans, according to the letter. Helicopter training is the most expensive form of education paid for under the GI Bill. See March 23, 2015 Times story by clicking here.

The GI Bill  covers 36 months of tuition and fees for veterans in degree programs at public universities and colleges. It was thought, erroneously, that schools as would act as natural allies in controlling costs. Instead, some schools have used their newfound ability to offer veterans all-expenses-covered training in costly helicopters as a recruiting tool.  

Yavapai College also charges persons in the helicopter program about $660 per credit, rather than the $75 per credit it claims is the base tuition for courses.  Until the action by the VA, most of the credit fees and other costs were paid by the American taxpayer via the Veterans Administration.  

 

 

 

Can McCain and Gosar save the flight program?

College turns to politicos to bail it out of flight program mess

Scott Orr, in a story in Friday’s Prescott Daily Courier, reported that Yavapai College has turned to Senator John McCain and Congressman Paul Gosar to bail it out of its flight program registration mess.  (You can read Mr. Orr’s story by clicking here.)  They have authored a joint letter asking the Veterans Administration to change its ruling as it affects about 40 students scheduled to begin training in May.

According to the Veterans Administration, the College has failed to comply with its 85/15 rule, which requires that 15 percent of students enrolled in the flight school program must be civilian, non-veterans.  On March 24, the Veterans Administration sent YC a letter saying that it would not pay benefits for students enrolled in the summer session, although it would continue to fund classes for those already in the program.

messIn their joint letter, the two politicos argued that “recent actions may negatively affect a number of veterans who have already moved to the Prescott area based on their acceptance to this program.” The letter also noted that some Veterans may have used their own money to move and others may have used a one-time Department of Defense allowance to pay for relocation. 

The VA decision affects about 40 students originally scheduled to begin classes May 11.