Until fate, in the person of a private investigator, brought her together with a Mississippi whistle-blower lawyer named Timothy Matusheski, Debra Leveski didn’t even know she could sue her former employer, the for-profit university ITT Educational Services, for supposedly duping the federal government. Leveski spent about 10 years working at ITT’s campus in Troy, Michigan, first as a recruitment officer, then in the financial aid office. She left the company in 2006 as part of the settlement of a sexual harassment suit she brought against ITT. Less than six months later, Leveski received a letter from an investigator working for Matusheski, who at the time specialized in False Claims Act suits against for-profit universities, which had come under scrutiny for allegedly enrolling students simply to receive federal student aid funding. Intrigued, Leveski called the investigator and eventually met with Matusheski.
The Mississippi lawyer told me that when his investigator first reached out to Leveski, his intention was just to find out something from her about ITT’s financial aid procedures. (He knew from public records in her harassment suit that she had worked in the company’s financial aid office.) “After listening to her talk,” he said, “I said she had a potential claim under the False Claims Act and she should ask her attorney about it.” According to Matusheski, Leveski consulted her lawyer, who sent her back to him. Leveski then did some research on FCA cases, including a previously dismissed FCA case against ITT, and on Matusheski. In July 2007, the Mississippi lawyer filed an FCA case against ITT in federal court in Indianapolis, naming Leveski as the relator.
Does this chain of events raise your suspicions about the validity of Leveski’s suit? What if I told you that Matusheski advertised to find former financial aid and recruiting officers from for-profit institutions? Or that the whistle-blower lawyer brought a series of FCA suits on behalf of former employees he tracked down through their unrelated employment suits?
U.S. District Judge Tanya Walton Pratt certainly took a dim view of Leveski’s suit, which the Justice Department declined to join. Even though a previous judge twice denied motions to dismiss by ITT’s lawyers at Gibson, Dunn & Crutcher, Pratt tossed the case in August 2011, concluding that the old FCA case against ITT that Leveski had reviewed before filing her suit amounted to a public disclosure of the practices Leveski alleged. Leveski didn’t add sufficient detail to distinguish her claims from the previous suit, the judge said, and didn’t have enough direct and independent knowledge to be considered an original source of new information. Pratt mentioned the dismissal of two of Matusheski’s other FCA suits in the August 2011 ruling, but the judge really ripped into the plaintiffs lawyer in a subsequent opinion in March 2012 awarding ITT $394,998 in attorneys’ fees from Matusheski, Leveski’s local counsel at Plews Shadley Racher & Braun and a late entry to the case, Motley Rice. Pratt wrote that Matusheski had “tiptoed around sanctions awards” in two previous FCA cases against for-profit educational institutions, which made his decision to proceed with the substantially similar Leveski case “risky, if not ridiculous.”
“Matusheski’s tactics are far worse than the garden-variety ‘ambulance chasing,’” Pratt wrote.