US reaches $95.5M settlement in for-profit education case


The Obama administration has reached a $95.5 million settlement with a Pittsburgh firm that runs for-profit trade schools and colleges.

The Justice Department settlement resolves allegations that Education Management Corp. used enrollment incentives to pay its recruiters and exaggerated its career-placement ability.

The government says the firm relied on deceptive recruiting tactics to sign up students it knew were unlikely to succeed or finish its programs.

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Attorney General Loretta Lynch says the company acted as a "recruitment mill" and violated students' trust.

The company faces financial and regulatory troubles. Eight directors resigned earlier this year as the firm restructured to cut its debt.

The settlement resolves a consumer fraud investigation brought by a coalition of attorneys general and separate whistleblower lawsuits.