Beauty school must pay $11 million in federal fraud case

A now shuttered for-profit beauty school chain will pay the government and six whistleblowers $11 million over claims the school defrauded the feds out of federal financial aid funds.

Marinello Schools of Beauty settled with the former employees, who settled a suit filed under the false claims act — a law that allows whistleblowers to file a suit on behalf of the government if they believe their company is misusing taxpayer money — earlier this year. The terms of the settlement weren’t previously reported.

The former employees — whose jobs included financial aid officers, instructors, career services managers and campus director — accused the company officials of using a variety of tactics to maximize the amount of financial aid funding the school received from the government.

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