S.C. cosmetology school ordered to pay $9.2million

A federal court judge has ordered the owner of a South Carolina cosmetology school to pay $9.2 million in damages for filing false claims to the U.S. Department of Education for federal student loans and grants.

According to U.S. District Attorney William Nettles, Jay Lacy owned the Lacy School of Cosmetology, which before it closed, had four offices in Aiken, Goose Creek, Lexington and Charleston. The education department approved for the school to participate in federal student aid programs.

During the investigation, Nettles said the government learned that the school misappropriated funds by knowingly failing to comply with numerous federal program requirements, making unauthorized disbursements of federal student aid funds, failing to refund student credit balances and concealing its actions by submitting false statements of compliance.

“This use of the False Claims Act shows we are on the leading edge of qui tam litigation across the country,” Nettles said. “Through this type of litigation we continue our efforts to stop fraud and protect federal funds.”

The case was brought to the attention of the U.S. District Court by a whistleblower, who was represented by the Richard A. Harpootlian Law Firm in Columbia.

This story was originally published February 17, 2016 at 12:55 PM with the headline "S.C. cosmetology school ordered to pay $9.2million."