Oral Roberts University settles U.S. claim it violated admissions incentive ban

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By Jonathan Stempel

(Reuters) - Oral Roberts University agreed to pay $303,502 to resolve allegations it illegally compensated a recruiter with a share of tuition the school received by enrolling recruited students, the U.S. Department of Justice said on Wednesday.

The settlement resolves whistleblower allegations under the federal False Claims Act that payments the private evangelical Christian university made to the recruiter Joined Inc violated a federal ban on incentive compensation.

Oral Roberts was accused of violating Title IV of the Higher Education Act, which bars colleges receiving federal student aid from compensating recruiters based on their success in enrolling students, through its dealings with Joined from 2014 to 2016.

The Tulsa, Oklahoma-based school did not admit liability, and denied some allegations by the government and the whistleblower Maurice Shoe in papers filed with the federal court in Greenville, South Carolina.

"Our higher education system should prioritize the educational interests of students, not the financial interests of schools and recruiters," U.S. Attorney Sherri Lydon in South Carolina said in a statement.

Oral Roberts had no immediate comment on the settlement. Its payment includes $151,751 in restitution.

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The settlement is separate from the national scandal in which wealthy parents were accused of paying five- to seven-figure sums to gain their children's admission to prestigious colleges.

Shoe, the president of Joined and a minority owner, said he sued in 2016 after learning that his company had illegal relationships with South Carolina-based North Greenville University and other schools.

He will receive $45,525 from the Oral Roberts settlement. North Greenville previously settled, court papers show.

The False Claims Act lets whistleblowers sue on behalf of the federal government, and share in recoveries.

(Reporting by Jonathan Stempel in New York; editing by Bill Berkrot)

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