The parents of a former student, along with former school teachers and administrators, sued UHS of Delaware (UHS) in 2009, alleging that UHS breached the terms of its contracts with public school districts and violated California law in connection with a number of special needs non-public schools and a central bookkeeping office in Grand Terrace, California, it owned and operated.
The suit alleged that UHS employed several teachers who were either inappropriately credentialed or not credentialed at all. For example, the lead plaintiff, who has autism, attended a UHS school in Elmira which allegedly charged public school districts significant monthly fees, as high as $231,000 in one month, for special education services delivered to 80 students, but which had between zero and three properly-certified special education teachers on staff at any given time. The plaintiffs alleged that the company’s practice was to “warehouse” students with any available salaried or hourly employee and then invoice the respective school districts as though the contracted services had been properly performed. They alleged that UHS falsely attested to its compliance with the contract terms, created false records, and submitted false claims to the California State Department of Education for reimbursement.
In August 2012, UHS entered into a settlement agreement with the California Attorney General and the Plaintiffs; although UHS did not admit liability in the agreement, it agreed to pay $4.25 million to settle the case.