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

chronically absent

Newark’s absenteeism problem persists as thousands of students miss several days this year, new data show

PHOTO: Patrick Wall/Chalkbeat
Superintendent Roger León addressed ninth-graders in September. That month, about 30 percent of those students were considered "chronically absent."

Thousands of Newark students have already missed multiple school days this year, newly released data show, even as the district’s new superintendent makes improving attendance a top priority.

About one in five students missed more than a week’s worth of class during the first three months of school, according to the district data. Those roughly 8,000 students are already considered “chronically absent.”

Newark has long grappled with exceptionally high rates of chronic absenteeism, which is defined as missing 10 percent or more of school days in an academic year for any reason. Students who miss that much school tend to have lower test scores, higher dropout rates, and greater odds of getting in trouble with the law.

The district’s new superintendent, Roger León, has promised to attack the issue — even going so far as to set a district goal of 100 percent attendance. But the new data, which León released this week, show how far the district has to go.

Nearly 9 percent of of the district’s 36,000 students have already missed the equivalent of more than two school weeks, according to the data. Those 3,200 or so students are labeled “severely chronically absent.”

Experts say that tracking and publicizing attendance data, as León has done, is the first step in combating absenteeism. Now, some district leaders are calling for the next phase of work to begin — analyzing why so many students are missing class and taking steps at the district and school level to help get them to school.

“It’s great that we have all this great data,” Newark Board of Education member Kim Gaddy said at a board meeting last month. “But if you have the data and you’re not using the data to change the situation, we won’t do any justice to our children in this district.”

Students who missed six or more school days from September through November qualify as chronically absent. If they continue at that pace, they are on track to miss the equivalent of a month or more of school by June. Students who missed 10.5 days or more during those three months count as severely chronically absent.

Attendance from Sept. to Nov. 2018. | Green = absent 0-2.5 days | Yellow = absent 3-5.5 days | Orange = absent 6-10 days | Red = absent 10.5 or more days. | Credit: Newark Public Schools

The early data show that Newark’s long-standing absenteeism patterns are continuing. The chronic absenteeism rates over the past three months were about the same as in 2016, according to the data.

The problem remains most acute among the district’s youngest and oldest students: 41 percent of pre-kindergarteners were chronically absent this November, as were 45 percent of 12th-graders. At least a third of students at five high schools — Barringer, Central, Malcolm X Shabazz, Weequahic, and West Side — were severely chronically absent last month.

While absenteeism rates varied among schools, they tended to be highest in the city’s impoverished South Ward.

“I’m concerned particularly about the South Ward,” Gaddy said at the Nov. 20 board meeting. “That’s where our children need the most assistance.”

León, a former principal who became schools chief on July 1, has already taken some early steps to improve attendance.

His most visible effort was a back-to-school campaign called “Give Me Five,” where he ordered every district employee to call five families before the first day of school. The campaign, for which León himself recorded robocalls to families, appears to have made a difference: 91 percent of students showed up the first day, the highest rate of the past four years, according to district data. (In 2013, when former Superintendent Cami Anderson launched her own attendance campaign, about 94 percent of students attended school the first day.)

The district also eliminated some early-dismissal days, which typically have low attendance. And students with mid-level test scores whom León has targeted for extra support have had better attendance this year than their peers, officials said.

Attendance in Nov. 2018 | Green = 0-0.5 days absent | Yellow = 1-1.5 days absent | Orange = 2-2.5 days absent | Red = 3 or more days absent | Credit: Newark Public Schools

However, León hit a snag trying to enact the crux of his attendance plan — reinstating more than 40 attendance counselors whom Anderson laid off years ago to cut costs. The state’s civil service commission has said the district must offer the jobs to the laid-off counselors before hiring anyone new, León told the board — forcing the district to track down former employees who, in some cases, have moved to different states. Only eight counselors have been hired to date, but León said he hopes to fill the remaining positions next month.

Meanwhile, León is arguing that some of the responsibility for improving attendance falls on families. At November’s board meeting, he said some parents and guardians “believe that, in fact, they can keep their children home” from school. At a parent conference this month, he took that message directly to families.

“I don’t care if school ends at 10 and they’re only going to come for an hour, and half an hour is on a bus,” he told several hundred parents who showed up for the daylong summit. “When I tell you that your child is coming to school, it’s your job to make sure the child comes to school.”

Afterwards, several parents and school employees said they welcomed León’s tough talk on attendance.

“It was about parents ensuring kids are in school and they are doing good,” said Bilikis Oseni, who has a child in first grade at Camden Street School. “Attendance is very key.”

Still, Newark families face many obstacles in getting their children to school, according to a 2016 report on chronic absenteeism among young students. Parents cited a lack of school busing, asthma and other childhood health problems, and work schedules that make it hard to drop off their children in the morning. High school students listed uninspiring classes, mental-health challenges, and safety concerns when traveling to school as reasons why they don’t show up, according to a 2017 report.

At the November board meeting, several members asked León whether he planned to dig deeper into the causes of absenteeism.

“I was looking through all the statistics here in the packet,” said Andre Ferreira, the board’s student representative, who attends Science Park High School. “But there were none that looked towards having a survey of students themselves telling you why they aren’t coming to school.”

León noted that he held forums with high-school students in September where he stressed the importance of showing up. He also said he has a student-only email address that some students have used to explain why they miss school.

“So I’m gathering data that lets me know why a particular student in fact hasn’t been to school,” he said. “Ultimately, we would have to do that for every single student, in every classroom, in every grade, in every school. That’s really the work — and it’s hard to do.”

Peter Chen, who co-authored the two reports on chronic absenteeism in Newark, said the superintendent had taken a crucial first step by raising awareness about the city’s attendance challenges. The district also appears to be sharing attendance data more regularly with schools, he said.

The next step is for the district to help schools identify and assist students who are chronically absent. The central office can do that by sharing effective attendance strategies, training school workers on how to support students’ social and emotional well-being, and offering grants to fund schools’ own attendance campaigns, he added.

“This is something that requires tailored, school-level responses,” said Chen, who is a policy counsel for Advocates for Children of New Jersey. “The district can help support some of that — but it’s not something that’s easy to impose from on high.”

Newark Enrolls

Want to attend one of Newark’s coveted magnet schools? Get ready to take a test.

Newark students who hope to attend one of the district's six magnet schools will have to take a new exam in January.

Newark students will soon face a new hurdle when trying to snag seats at the city’s most popular high schools.

Next month, any student who wants into one of the city’s six magnet schools will have to take a new exam that gauges their academic prowess as well as their interest in each school’s theme.

“If you would like to go to any of those schools,” Superintendent Roger León told parents at a conference Wednesday, “you better get ready for the test to get in.”

The exam, which will be given to students on Jan. 11-12, has not yet been announced on the district’s enrollment site. In fact, the test itself is still being developed and logistical details, such as where students will take it, are still being determined, officials said.

In addition to the new test, each school will also begin interviewing applicants, León said — something only two magnet schools did last year, according to an admissions guide. It’s unclear whether the interviews will take place this admission cycle. If so, schools may have to schedule dozens or even hundreds of interviews in the coming weeks.

Meanwhile, enrollment for next school year began on Dec. 3 and continues through February — giving students and schools little time to prepare for the new requirements.

“I know as much as you know right now,” one principal said. “Obviously the superintendent is revamping some items, but he hasn’t really shared the details with everyone.”

The district-run magnet schools, which have themes such as science and American history, include some of the city’s most sought-after high schools. Last year, nearly 1,800 eighth-graders listed a magnet school first on their high-school applications even though the schools had space for only 971 students.

The magnets, which vastly outperform the district’s six traditional high schools, already screen applicants. They look at grades, state test scores, attendance records, and — in the case of Arts High School — an audition or visual-art portfolio, when deciding which students to let in.

But even with those screens, some admitted students are not prepared for the rigor of work at the magnets or lack a strong interest in their programs, León said.

“The idea is to make sure that students who choose to go to these schools are going to meet whatever are the demands of that school,” he told Chalkbeat. “It’s not that your parents have the right to choose for you to go.”

Even as he moves to make magnet schools more selective, León — who became superintendent in July — also hopes to make traditional schools more appealing to top students.

On Wednesday, he also announced plans to create gifted-and-talented programs at each of the traditional high schools. To qualify, students will also take the new magnet-school exam.

León did not go into detail about what the programs will entail. But he may be drawing from his previous experience as principal of University High School, a magnet school that advertises a gifted-and-talented program on its website. Students must test into the program, which includes a “rigorous curriculum” in English, math, and another language, according to the site.

“Students are going into magnets because they think that’s where they can get their high-performing education,” he said. “Now they’ll be given a reason to not do that.”

The traditional schools will also develop specialized “academies” to train students for various careers, including engineering, teaching, and health services. Each school will partner with a higher-education institution and a professional organization to develop those programs.

Many Newark schools have tried to offer vocational programs, but often struggle to find qualified teachers and meet the stringent requirements to receive federal funding. It’s unclear how the district will help them overcome those challenges, especially if the timeline is also aggressive.

Traditional schools, for their part, seem eager for any support they can get. Angela Mincy, principal of Barringer High School, said the school created an honors program last year in an effort to retain high-achieving students.

“If I don’t create an isolated experience for them, I will lose them,” she said in an interview last month, adding that the goal is to keep attracting more and more top students. “The hope is that one day, one honors track will become two will become three.”

With their selective admissions and college-oriented courses, the city’s magnet schools have long been seen as a refuge for high-achieving students who cannot afford private school. County-run vocational schools, which also screen applicants, are another popular option along with some charter high schools — though they often have few seats left over for students who did not attend their lower-grade schools.

The district’s traditional, or “comprehensive,” high schools are viewed by many families as schools of last resort. On nearly every academic measure — attendance rates, test scores, college enrollment and completion — the traditional schools lag far behind the magnets.

In a sense, this disparity is built into the system. Magnet schools are designed to enroll academically and artistically accomplished students. Traditional schools take the rest, including almost all students who are still learning English and the majority of those with disabilities.

Other cities have begun to rethink this practice of tracking students into separate schools according to ability — at least as measured by a single test. In New York City, where a debate has raged over admissions to the district’s coveted “specialized” high schools, the mayor has proposed scrapping the schools’ entrance exam. Instead, he said, they should reserve spots for the top students from every middle school.

Some Newark parents have floated a similar plan for the city’s most exclusive magnet school, Science Park High School. Instead, Superintendent León is pursuing the opposite approach — adding new entrance exams for all magnet schools. In other cities, exam schools tend to be highly segregated by race and class, favoring families with the wherewithal to help students prepare for the exams or pay for test prep.

León said he expects the new magnet exams will measure students’ reading and math proficiency, as well as their interest in each school’s particular focus, such as science or technology.

“The whole concept that anyone and everyone can get into the magnet high schools — that’s not why they were designed,” said León, who graduated from Science High School. “You actually have to qualify to get into those schools.”

Karen Gaylord, Science Park High School’s community engagement specialist, said some teachers and  parents may grumble about the new test because they haven’t had a chance to prepare students for it. But she noted that families had become “resigned” to entrance exams when magnet schools used them in the past.

She also said many people would welcome the admissions interviews as a way for students to highlight skills and interests that aren’t reflected on their transcripts. The question, she said, is how schools will carry out these changes on such a tight timeline.

“It feels like there are so many opportunities to get this right,” she said. “I’m just not sure we’re going to get them all in this year. The clock is ticking.”