United States of America et al v. Fast Train II Corp., et al
OMNIBUS ORDER ON MOTIONS FOR SUMMARY JUDGMENT granting 131 Motion for Summary Judgment; denying 142 Motion for Summary Judgment. Closing Case. Motions Terminated: 178 MOTION for Leave to File filed by Alejandro Amor, 214 MOTION in Limine MOTION to Strike 207 Notice (Other), filed by Alejandro Amor, 210 MOTION for Hearing filed by Alejandro Amor, 188 Plaintiff's MOTION for Leave to File Unilaterally, (1) Pretrial Stipulation, (2) Statement of Legal Elem ents of Plaintiff's Claims and (3) Summary of Parties' Motions in Limine filed by United States of America, 154 Plaintiff's MOTION to Strike 141 Response in Opposition to Motion, 142 MOTION for Summary Judgment o f Defendants In Order to Effectuate Court's September 9, 2016 Endorsed Order [E.C.F. 143] filed by United States of America, 147 MOTION for Summary Judgment filed by Alejandro Amor, 215 MOTION for Hearing filed by Alejandro Amor, 180 MOTION to Exclude Testimony Or Exhibits As To Defendant's Financial State And Wealth filed by Alejandro Amor, 131 Plaintiff's MOTION for Summary Judgment With Supporting Memorandum of Law Against Defendants filed by U nited States of America, 196 Plaintiff's MOTION to Stay and MOTION to Continue Until After the Court Rules on the Parties' Summary Judgment Motions [E.C.F. 131 and E.C.F. 147] filed by United States of America, 179 MOTION to Limit Evidence filed by Alejandro Amor, 213 MOTION to Strike 185 Response in Opposition to Motion,, 204 Exhibit List, 187 Response to Motion,,, 203 Notice (Other),,,,,,,, 186 Plaintiff's MOTION in Limine (Con solidated) to (i) Estop Defendant from Denying Essential Elemen filed by Alejandro Amor, 184 MOTION for Hearing filed by Alejandro Amor, 182 MOTION in Limine filed by Alejandro Amor, 181 MOTION In Limine to Exclude All Evidence, Refere nces, Arguments or Inferences Relating to Defendant Amor's Criminal Proceeding and Conviction filed by Alejandro Amor, 195 Plaintiff's MOTION to Strike 194 Memorandum Plaintiffs Motion To Strike And/Or Opposition Response To D efendants Unauthorized Supplemental Summary Judgment Brief filed by United States of America, 201 MOTION to Strike 198 Reply to Response to Motion, 190 Notice (Other),,, filed by Alejandro Amor, 186 Plaintiff's MOTION in Li mine (Consolidated) to (i) Estop Defendant from Denying Essential Elements of the False Claims Act Claims; Exclude Defendants: (ii) Six-Credit Hour Eligibility Option Aargument; (iii) Double-Jeopardy and Eighth Amendment filed by United States o f America, 158 MOTION to Preclude Plaintiff's Qualifying and Introducing David Bartnicki as an Expert Witness re 157 Witness List filed by Alejandro Amor, 142 MOTION for Summary Judgment filed by Alejandro Amor. Signed by Judge Marcia G. Cooke on 2/15/2017. (tm) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 12-Civ-21431-COOKE/TORRES
UNITED STATES OF AMERICA, et al.,
FASTTRAIN II CORP.,
d/b/a FASTTRAIN COLLEGE,
an administratively dissolved for profit
Florida corporation and ALEJANDRO
AMOR, an individual,
OMNIBUS ORDER ON MOTIONS FOR SUMMARY JUDGMENT
This is an action under the federal False Claims Act, 31 U.S.C. §§ 3729-3733
(“FCA”). Plaintiff, the United States of America, alleges Defendants FastTrain II Corp.,
d/b/a FastTrain College (“FastTrain”) and its President, Chief Executive Officer and coowner, Alejandro Amor,1 knowingly presented, or caused to be presented, false statements
and claims to the United States and the United States Department of Education (“DOE”).
Plaintiff seeks treble damages and civil penalties.
I have jurisdiction under 28 U.S.C. § 1331 and 31 U.S.C. § 3732(a).
Pending are: (1) the United States’ Motion for Summary Judgment (ECF No. 131);
and (2) Amor’s Cross-Motion for Summary Judgment (ECF No. 141).2 For the reasons
that follow, I grant Plaintiff’s Motion and deny Defendant’s Motion.
On October 26, 2016, I granted Amor’s leave to proceed pro se in this action. (ECF No.
103). With respect to FastTrain, however, I granted Plaintiff’s Motion for Default
Judgment (ECF No. 173) because after FastTrain’s counsel withdrew, it failed timely to
obtain new counsel. See Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1386 (11th Cir. 1985).
Amor’s September 22, 2016 Cross-Motion for Summary Judgment was untimely, as
dispositive motions were due by August 26, 2016. Nonetheless, in the interest of bringing
this tortuous litigation to a long-overdue final resolution, I address Amor’s arguments
This action arises from violations of the FCA and common law by FastTrain and
its President, Chief Executive Officer, and co-owner Amor. From at least January 2010
through June 2012, when FastTrain closed, FastTrain and Amor knowingly presented, or
caused to be presented, false claims and statements to the DOE and concealed material
information in order to participate in the federal student aid programs authorized under
Title IV of the Higher Education Act of 1965 (“HEA”), as amended, 20 U.S.C. §§ 1070 et
seq. (“Title IV, HEA Programs”).
At Amor’s direction, FastTrain knowingly submitted and/or caused to be
submitted false information relating to the eligibility of students to receive Title IV, HEA
Programs funds – through the Federal Pell Grant Program (Pell Grant”), the Federal
Family Educational Loan Program (“FFEL”), the Federal Direct Loan Program (“FDL”)
and the Campus Based Programs – by providing false documentation that certain students
had a high school diploma or its recognized equivalent when in fact they did not have such
credentials. Also at Amor’s direction, FastTrain admissions employees instructed and
counseled ineligible prospective students to provide false high school completion
attestations and further coached them to lie on their Free Application for Federal Student
Aid (“FAFSA”), the document that students file to obtain Title IV, HEA funds. As a result
of Amor’s fraudulent scheme and false representations of Title IV eligibility, FastTrain
received millions of dollars of Title IV financial aid that it otherwise would not have
After a twenty-three day trial in United States of America v. Alejandro Amor, Case No.
1:14-cr-20750-JAL(s)-1 (S.D. Fla.) (“Amor Criminal Proceeding”), a jury convicted Amor of
one count of conspiracy to steal Government funds, in violation of Title 18, United States
Code, Section 371, and twelve counts of theft of Government funds, in violation of Title
18, United States Code, Section 641.3 The United States now seeks to recover treble
damages and civil penalties under the FCA for Amor’s illegal acts.
II. STANDARD OF REVIEW
Summary judgment “shall be granted if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there
Amor Criminal Proceeding, ECF Nos. 393, 489.
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Allen v. Tyson Foods, Inc., 121 F.3d 642 (11th Cir. 1997)
(quoting Fed. R. Civ. P. 56(c)) (internal quotations omitted); Damon v. Fleming
Supermarkets of Florida, Inc., 196 F.3d 1354, 1358 (11th Cir. 1999). Thus, the entry of
summary judgment is appropriate “against a party who fails to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
“The moving party bears the initial burden to show the district court, by reference
to materials on file, that there are no genuine issues of material fact that should be decided
at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “Only when that
burden has been met does the burden shift to the non-moving party to demonstrate that
there is indeed a material issue of fact that precludes summary judgment.” Id.
Rule 56 “requires the nonmoving party to go beyond the pleadings and by her own
affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’
designate ‘specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at
324. Thus, the nonmoving party “may not rest upon the mere allegations or denials of his
pleadings, but must set forth specific facts showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks omitted).
“A factual dispute is genuine if the evidence is such that a reasonable jury could
return a verdict for the non-moving party.” Damon, 196 F.3d at 1358. “A mere ‘scintilla’
of evidence supporting the opposing party’s position will not suffice; there must be enough
of a showing that the jury could reasonably find for that party.” Abbes v. Embraer Servs.,
Inc., 195 F. App’x 898, 899-900 (11th Cir. 2006) (quoting Walker v. Darby, 911 F.2d 1573,
1577 (11th Cir. 1990)).
When deciding whether summary judgment is appropriate, “the evidence, and all
inferences drawn from the facts, must be viewed in the light most favorable to the nonmoving party.” Bush v. Houston County Commission, 414 F. App’x 264, 266 (11th Cir.
III. THE FALSE CLAIMS ACT
The FCA provides that:
(1) [A]ny person who –
(A) knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval; [or]
(B) knowingly makes, uses, or causes to be made or used, a
false record or statement material to a false or fraudulent
is liable to the United States Government for a civil penalty of not
less than $[5,500] and not more than $[11,000], as adjusted by the
Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C.
2461 note; Public Law 104–41), plus 3 times the amount of damages
which the Government sustains because of the act of that person.
31 U.S.C. § 3729(a)(1)(A)-(B); see 28 C.F.R. § 85.3(a)(9) (adjusting penalties for inflation).
As used in the FCA, a “claim”
(A) means any request or demand, whether under a contract or
otherwise, for money or property and whether or not the United
States has title to the money or property, that –
(i) is presented to an officer, employee, or agent of the United
States . . .
31 U.S.C. § 3729(b)(2), as amended.
While Congress did not define what makes a claim “false” or “fraudulent,” the
“phrase ‘false or fraudulent claim’ in the [FCA] should be construed broadly.” United States
ex rel. Sanchez v. Abuabara, 2012 WL 254764, at *6 (S.D. Fla. 2012) (quoting Harrison v.
Westinghouse Savannah River Co., 176 F.3d 776, 788 (4th Cir. 1999); see S. Rep. No. 99-345,
at 9 (1986). The FCA does not require specific intent to defraud, only knowledge of the
false information or deliberate ignorance or reckless disregard of its falsity. 31 U.S.C. §
The FCA further provides that:
Notwithstanding any other provision of law, the Federal Rules of
Criminal Procedure, or the Federal Rules of Evidence, a final
judgment rendered in favor of the United States in any criminal
proceeding charging fraud or false statements, whether upon a verdict
after trial or upon a plea of guilty or nolo contendere, shall estop the
defendant from denying the essential elements of the offense in any
action which involves the same transaction as in the criminal
proceeding and which is brought under subsection (a) or (b) of
31 U.S.C. § 3731(e).
Before I turn to the merits of the parties’ Motions, I first address two procedural
arguments Amor raises. He asserts: (1) this Court lacks subject matter jurisdiction because
the Government is a party to a civil administrative money penalty proceeding involving
Amor; and (2) the Second Amended Complaint (“SAC”) does not meet the heightened
pleading standards of Fed. R. Civ. P. 9(b).4 (ECF Nos. 141, 162).
A. Subject Matter Jurisdiction
Amor argues that the Court lacks subject matter jurisdiction under 31 U.S.C. §
3730(e)(3) and (4), and lacked jurisdiction over the dismissed Relator’s original qui tam
complaint, because FastTrain was subject to a 2011 DOE Program Review. The relevant
subsections of § 3730(e) provide:
(3) In no event may a person bring an action under subsection (b)
which is based upon allegations or transactions which are the subject
of a civil suit or an administrative civil money penalty proceeding in
which the Government is already a party.
(4)(A) The court shall dismiss an action or claim under this section,
unless opposed by the Government, if substantially the same
allegations or transactions as alleged in the action or claim were
publicly disclosed –
(i) in a Federal criminal, civil, or administrative hearing in which
the Government or its agent is a party;
(ii) in a congressional, Government Accountability Office, or
other Federal report, hearing, audit, or investigation; or
(iii) from the news media, unless the action is brought by the
Attorney General or the person bringing the action is an original
source of the information.
31 U.S.C. § 3730(e)(3)-(4).
In addition to these arguments, Amor contends: (1) students do not need a high school
diploma or equivalent degree to be eligible for federal student aid; (2) students were not, in
fact, ineligible; (3) this action violates the Double Jeopardy Clause of the Fifth
Amendment; and (4) res judicata established Government loss to be $1,900,000. (ECF
Nos. 141, 162).
Amor’s “public disclosure bar” argument fails because he provides no evidence that
the DOE’s preliminary Program Review Report5 about FastTrain (ECF No. 141-1) ever
reached the public domain (i) in a Federal criminal, civil, or administrative hearing in
which the Government or its agent is a party; (ii) in a congressional, Government
Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from
the news media. See United States ex rel. Wilson v. Graham Cty. Soil & Water Conservation
Dist., 777 F.3d 691, 697 (4th Cir. 2015) (“[T]he government is not the equivalent of the
public domain.”) (quoting Kennard v. Comstock Res., Inc., 363 F.3d 1039, 1043 (10th Cir.
2004)). Indeed, federal law requires the DOE to “maintain and preserve” the
confidentiality of any program review report until the institution has responded and the
DOE issues a Final Program Review Determination (“FPRD”). 20 U.S.C. § 1099c-1(b)(6)(8). That never happened here. Where there is “no ‘public disclosure’ under section
3730(e)(4)(A), [the] qui tam action is not jurisdictionally barred under that section.”6
United States ex rel. Williams v. NEC Corp., 931 F.2d 1493, 1500 (7th Cir. 2016).
As for Armor’s arguments under § 3703(e)(3), it is his burden to show that the
Government is a party in an administrative civil money penalty proceeding based on the
same allegations or transactions at issue in this case. See United States ex rel. Johnson v. Shell
Oil Co., 26 F. Supp. 2d 923, 928 (E.D. Tex. 1998) (burden lies with defendant). He is
correct that the FCA does not define the phrase, “administrative civil money penalty
According to the DOE’s Program Review Guide, the purpose of a program review is to
promote and improve compliance by improving institutional performance. The reviewer(s)
will: (1) analyze the institution’s data and records and identify any weaknesses in the
institution’s procedures for administering Title IV, HEA program funds; (2) frame required
actions and recommendations that will strengthen the institution’s future compliance with
Title IV, HEA rules and regulations; (3) quantify any harm resulting from the institution’s
impaired performance and identify liabilities where noncompliance results in loss, misuse,
or unnecessary expenditure of federal funds; determine the extent to which any
weaknesses in the institution’s administration of Title IV, HEA program funds may subject
students and taxpayers to potential or actual fraud, waste, and abuse; and (4) refer
institutions for administrative action to protect the interests of students and taxpayers,
when necessary. Program Review Guide for Institutions (2009), https://ifap.ed.gov/
In any event, the United States has invoked its statutory right under 31 U.S.C. §
3730(e)(4) to oppose dismissal on this basis.
proceeding,” and thus leaves it open to interpretation. The fact is, however, that the
preliminary Program Review Report contains no demand for payment of a money penalty.
Cf. id. (payment demands and audit letters do not bar suit under § 3730(e)(3)). Indeed, the
DOE may seek to recover money from an institution only after it issues an FPRD. 34
C.F.R. pt. 668. Again, that never happened here. Amor therefore has not convinced me
that the preliminary Program Review Report is an administrative civil money penalty
proceeding that would bar this action under § 3730(e)(3), or that it is evidence that such a
proceeding was pending.
Simply put, Amor’s contention that this Court lacks subject-matter jurisdiction is
B. Rule 9(b)
The United States contends Amor waived his argument under Rule 9(b) by failing
timely to raise it. But “Rule 9(b)’s pleading standard is not an affirmative defense that is
waived by a defendant’s failure to raise it” in an initial pleading. See, e.g., Olson v. Fairview
Health Servs. of Minnesota, 831 F.3d 1063, 1074 (8th Cir. 2016). A court may resolve a Rule
9(b) deficiency even on a motion for summary judgment. United State ex rel. Schwartz v.
Coastal Healthcare Group, Inc., 2000 WL 1595976, at *4 (10th Cir. 2000). That said, Amor’s
Rule 9(b) argument is unavailing.
A complaint under the False Claims Act must meet the Rule 9(b) pleading
standard. See United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1309-10 (11th
Cir. 2002) (noting “it was ‘well settled’ and ‘self-evident’ that the False Claims Act is ‘a
fraud statute’ for the purposes of Rule 9(b)”) (citation omitted). A False Claims Act
complaint satisfies Rule 9(b) if it sets forth “‘facts as to time, place, and substance of the
defendant’s alleged fraud,’ specifically ‘the details of the defendants’ allegedly fraudulent
acts, when they occurred, and who engaged in them.’” Id. at 1310 (quoting United States ex
rel. Cooper v. Blue Cross & Blue Shield of Fla., 19 F.3d 562, 567-68 (11th Cir. 1994)).
The SAC easily satisfies Rule 9(b)’s requirements. It specifies the substance of
Amor’s fraudulent acts in exacting detail, see generally ECF No. 83, including the
approximate time periods and, in some cases, specific dates of fraudulent acts, see, e.g., id.
¶¶ 63, 100, and who engaged in them, see, e.g., id. ¶¶ 86, 100. Amor’s argument under Rule
9(b) therefore fails.
C. The United States’ Arguments
I next address the United States’ arguments in support of its Motion, as they are
case dispositive. The United States contends: (1) Amor’s criminal conviction precludes
him from denying any of the elements of the fraudulent and/or false claims alleged in this
action; (2) Amor’s false claims were material to the DOE’s payments to FastTrain; (3) the
United States is entitled to treble damages; and (4) Amor is liable for civil penalties under
31 U.S.C. § 3729(a). I discuss the effect of Amor’s criminal conviction first.
1. The Effect of Amor’s Criminal Conviction
Under the principles of collateral estoppel, the preclusive effect of a criminal
conviction on future civil proceedings is well established. See, e.g., Emich Motors Corp. v.
Gen. Motors Corp., 340 U.S. 558, 568-69 (1951) (“It is well established that a prior criminal
conviction may work an estoppel in favor of the Government in a subsequent civil
proceeding.”). Under federal common law, for collateral estoppel to apply: “(1) the issue
must be identical in the pending case to that decided in the earlier proceeding; (2) the issue
must necessarily have been decided in the earlier proceeding; (3) the party to be estopped
must have been a party or have been adequately represented by a party in the earlier
proceeding; and (4) the issue must actually have been litigated in the first proceeding.”
Montalbano v. C.I.R., 307 F. App’x. 322 (11th Cir. 2009) (citing In re Raiford, 695 F.2d 521,
523 (11th Cir. 1983)).
For claims arising under the FCA, the principle of collateral estoppel is codified in
the FCA at 31 U.S.C. § 3731(e). The statute makes clear that a criminal conviction for a
violation of 18 U.S.C. §§ 371 and/or 641 estops a defendant in a FCA case from denying
the essential elements of the §§ 3729(a)(1)(A) and (B) offenses when the claims involve the
same transaction at issue in the defendant’s prior criminal proceeding. See, e.g., United States
v. Anghaie, 633 F. App’x. 514, 516 (11th Cir. 2015).7
Here, the Second Superseding Indictment against Amor and his co-conspirators
alleges, as the United States alleges in this action, inter alia, that the DOE approved
FastTrain to receive both Pell Grants and Direct Loans. See Second Amended Complaint,
E.C.F. No. 83 ¶¶ 37-68; Amor Criminal Proceeding, Second Superseding Indictment, ECF
No. 252 ¶¶ 15- 30. Amor signed Program Participation Agreements (“PPAs”) in which he
agreed that FastTrain would comply with all applicable federal statutes and regulations
relating to the Pell Grant and Direct Loan Programs, including, inter alia, the requirement
that FastTrain enroll only students with a high school diploma, GED, or other approved
credential. Based on those representations, the Government charged Amor with fraud or
false statements in the Amor Criminal Proceeding. For example, the Second Superseding
Indictment alleges, inter alia:
See also United States v. Aleff, 772 F.3d 508, 510 (8th Cir. 2014) (defendants who pled guilty
to conspiracy to defraud the United States by submitting false applications for loandeficiency payments estopped from denying essential elements of FCA offenses); United
States ex rel. Nottingham v. Thomas, 2015 WL 7424738 (E.D. Va. 2015) (criminal conviction
precludes denying liability); United States ex rel. Green v. Schuykill Products, Inc., 2014 WL
2154664 (M.D. Pa. 2014) (guilty plea for 18 U.S.C. § 371 violation conclusively
established all factual issues as to his liability under the FCA); United States v. Karron, 750
F.Supp.2d 480, 487 (S.D.N.Y. 2011) (defendant in a FCA suit precluded from denying
liability for false statements when previously convicted in criminal proceeding for the
“same transaction.”); United States v. Mastellone, 2011 WL 4031199 (S.D.N.Y. 2011)
(defendant who pled guilty to felony charge of fraudulently stealing money from the
United States, in violation of 18 U.S.C. § 641, “estopped from denying the essential
elements of the §§ 3729(a)(1)(A) and (B) offenses, since these claims involve the same
transaction at issue in [defendant]’s prior criminal proceeding, at which he pled guilty.”);
United States v. Sriram, 2008 WL 516306 (N.D. Ill. 2008) (statutory estoppel proper where
civil action involved the “same course of conduct” and overlapping “specific factual
matters” as prior criminal case); United States v. Eghbal, 475 F. Supp. 2d 1008 (C.D. Cal.
2007) (no genuine issue of material fact regarding liability under FCA because defendants’
prior convictions and admissions in plea agreements established that their false statements
caused the Government “to pay out money”).
PURPOSE OF CONSPIRACY
3. It was the purpose of the [Defendants’] conspiracy to unlawfully
enrich themselves by obtaining and misappropriating Pell Grant and
Direct Loan funds from the United States Department of Education
by making materially false and fraudulent representations, and by the
concealment of material facts, concerning, among other things, the
eligibility of students to receive Pell Grant and Direct Loan funds and
the students’ status as high school graduates.
MANNER AND MEANS OF THE CONSPIRACY
The manner and means by which the defendants and their coconspirators sought to accomplish the object and purpose of the
conspiracy included, among other things, the following:
4. Beginning in or around January 2010, ALEJANDRO AMOR
directed JOSE W. GONZALEZ, ANTHONY MINCEY, Michael
Grubbs, Luis Arroyo, Juan Arreola, Juan Peña, and others, to enroll
students without high school diplomas or GEDS in FastTrain.
AMOR further directed [them], and others, to coach those students to lie
to FastTrain financial aid representatives assisting students with their
FAFSAS, in order to falsely and fraudulently obtain Pell Grant and
Direct Loan funds for the students.
5. JOSE W. GONZALEZ, ANTHONY MINCEY, Michael Grubbs,
Luis Arroyo, Juan Arreola, Juan Peña, and others, acting at the
direction of ALEJANDRO AMOR, recruited students without high
school diplomas to enroll in FastTrain by, among other things, falsely
and fraudulently advising the students that they could obtain a high
school diploma for a fee and should falsely and fraudulently respond
yes when asked by FastTrain financial aid representatives whether
they had a high school diploma or GED.
6. ALEJANDRO AMOR, JOSE W. GONZALEZ, ANTHONY
MINCEY, Michael Grubbs, Luis Arroyo, Juan Arreola, Juan Peña,
and others, caused the students without high school diplomas to
submit FAFSAS to the United States Department of Education
falsely and fraudulently indicating that the student had graduated from
high school or had a GED.
7. As a result of these false and fraudulent FAFSAS, ALEJANDRO
AMOR received Pell Grants and Direct Loans from the United
States Department of Education.
8. ALEJANDRO AMOR used the proceeds from the false and
fraudulent FAFSAS for his own benefit and the benefit of others, and
to further the fraud.
See Amor Criminal Proceeding, Second Superseding Indictment, ECF No. 252, Purpose of
Conspiracy ¶ 3; Manner and Means of the Conspiracy ¶¶ 4, 5, 6, 7, 8 (emphasis added); see
also Second Superseding Indictment, ECF No. 252, Overt Acts ¶¶ 1-40.
The SAC in this case contains nearly identical allegations. To highlight just a few
7. Beginning in at least July 1, 2009 and continuing through its
closure in 2012, FastTrain engaged in a widespread scheme to defraud
the Department of Education in order to receive federal funding it
would not otherwise have been entitled to receive.
8. FastTrain made false statements and concealed material information
from the Department of Education in order to ensure that it would
continue to receive federal funding under Title IV of the HEA. For
example, FastTrain and its employees knowingly submitted and/or
caused to be submitted false information relating to the eligibility of
students to receive title IV, HEA program assistance, by providing
false documentation that students had high school diplomas or its
recognized equivalent, when such students did not have such
9. FastTrain engaged in fraudulent conduct in an attempt to secure
federal aid for students who, but for FastTrain’s conduct, would have
been ineligible for assistance under Title IV of the HEA. FastTrain
fabricated high school diplomas of some of its prospective students at
some of its campuses in order to permit unqualified students to enroll
at FastTrain. FastTrain then improperly received and retained Title
IV assistance for those unqualified students. FastTrain also told
prospective students who did not have high school diplomas or their
equivalency that they could enroll and receive federal financial
assistance if they attended FastTrain. FastTrain instructed and
counseled certain ineligible prospective students to provide false high
school completion attestations and further coached certain prospective
ineligible students to lie on Free Application for Federal Student Aid
(“FAFSA”) documentation. FastTrain also improperly received and
retained Title IV assistance for those unqualified students.
10. FastTrain also routinely altered attendance records of students who
were not meeting minimum requirements. FastTrain kept students on
its attendance rolls - and, as such, federal financial aid recipient list –
when students were not attending FastTrain. Finally, FastTrain
employees falsified financial aid records in order to secure more
federal funding for students than the students were eligible to receive.
11. Defendants’ conduct was knowing and material to FastTrain’s
continued eligibility to participate in the Title IV programs. As a
result of Defendants’ fraudulent scheme and false representations of
Title IV eligibility, FastTrain received millions of dollars of Title IV
financial aid that it otherwise would not have received but for
(ECF 83 ¶¶ 7-11) (emphasis added).
Amor argues that estoppel does not apply because the elements of his criminal
charges are different than the elements of the civil claims in this case. That argument
ignores the FCA’s plain language, which specifies that preclusion applies where “the
essential elements of the offense [in the civil case] . . . involve the same transaction as in
the criminal proceeding.” 31 U.S.C. § 3731(e) (emphasis added). The court’s Order
Denying Defendant Amor’s Motion for New Trial (ECF No. 410) in the Amor Criminal
Proceeding leaves no doubt that the transactions at issue there were the same as those at
issue here. It states, in relevant part:
This case arose from an investigation by the United States
Department of Education, Office of [Inspector] General, regarding
illegal student recruiting and enrollment practices at Fast Train, a forprofit college with seven campuses throughout Florida. Testimony at
trial revealed that Fast Train admissions representatives—acting at
the direction of the school’s owner, Defendant Alejandro Amor
(“Defendant”)—routinely recruited and enrolled students at Fast
Train who were not eligible for federal student aid because they did
not have a high school diploma or GED. In order to obtain federal
student aid on behalf of the ineligible students they recruited, Fast
Train admissions representatives . . . coached the students to falsely
claim that they did have the required credential—first on their Fast
Train enrollment paperwork, then in interviews with Fast Train’s
financial aid officers, and finally on their applications for federal
student aid (“FAFSAs”). As part of their efforts to induce ineligible
students to enroll in Fast Train, admissions representatives falsely
promised students they would earn a high school diploma while
attending Fast Train and, in some cases, representatives actually sold
students fictitious high school diplomas.
The Government presented approximately forty witnesses, including
several former Fast Train students who testified that they were
recruited, coached to lie on their FAFSAs about their eligibility for
student aid, and saddled with thousands of dollars in debt that they
are unable to repay. Most of the student witnesses testified that they
dropped out of Fast Train for personal reasons or because they were
not satisfied with the school. Six Jacksonville students identified
Mincey as the (or one of the) admissions representatives who falsely
advised them that a high school diploma or GED was not required
for admission to Fast Train.
The Government also presented the testimony of several former Fast
Train employees who were either directed by Defendant to enroll
ineligible students or fired for refusing to do so. For example, former
admissions director Luis Arroyo testified that he and his staff began
creating fake high school diplomas for ineligible students and that he
got the idea from Defendant, who had ordered education director
Santiago Martinez to create a diploma for a student. Additionally,
former financial aid representative Caridad Perez testified that
Defendant routinely pressured her to process ineligible students for
federal student aid, and ultimately fired her for refusing to do so.
Moreover, former admissions representative Jose W. Gonzalez
testified that, with Defendant’s blessing, he obtained invalid high
school diplomas for recruits from a high school called American
Worldwide Academy, by taking the test for students and collecting a
fee; in some cases, Mr. Gonzalez enrolled the students without
actually collecting the fee or providing the diploma at all. Finally, the
Government presented several emails and other documents, as well
as an audio recording, which, together with the testimony,
established that Defendant was repeatedly advised about the illegal
activities at Fast Train, and took active steps to conceal those
activities, including creating false reports of internal investigations,
fake “secret shopper” programs, and fake employee disciplinary
Defendant presented several witnesses in his defense. . . . Fifth,
former Fast Train operations manager German Vargas testified that
Defendant never asked him to do anything illegal and, in fact, that
Defendant had directed him to conduct an investigation into
allegations of misconduct raised by former Fast Train employee (and
Government witness) Joseph Bodden. . . .
The Government called eight rebuttal witnesses to establish that
Amor had falsified the results of the Bodden investigation, about
which German Vargas had testified. Specifically, the rebuttal
witnesses demonstrated that, even when presented with notes of the
investigation, which included names of Fast Train enrollees without
high school diplomas, Defendant had not only retained federal
student aid in those enrollees’ names, but had also prepared a lengthy
type-written report falsely claiming that the Bodden investigation had
revealed no improprieties in any area, including students without
Applying the criteria for estoppel under the FCA, Amor’s prior conviction has
preclusive effect in the instant case.8 The criminal and civil cases both involve the same
transactions – Amor’s fraudulent claims to the DOE.9 The falsity of Amor’s statements
and claims were central to his criminal charges, and are central to his liability in this case.
Thus, as a matter of law, the final judgment rendered in favor of the United States and
against Amor in the Amor Criminal Proceeding estops Amor from denying the essential
elements of the offense in this action. See 31 U.S.C. § 3731(e). The effect of this estoppel is
that Amor cannot deny liability under 31 U.S.C. § 3729(a)(1)(A) and (B).10
As Amor is estopped from contesting the FCA cause of action against him, there
are no genuine issues of material fact upon which Amor might craft a defense. Summary
Judgment in favor of the United States and against Amor is therefore warranted.
Accordingly, the only issue left for me to resolve is the amount of damages and/or civil
penalties to which the United States is entitled.
When found to have violated the FCA, a defendant “is liable to the United States
Government for . . . [three] times the amount of damages which the Government sustains
because of the act of that person,” plus civil penalties. 31 U.S.C. § 3729(a). Amor does not
appear to dispute that fact. Instead, he challenges the United States’ proposed measure of
single damages. He argues that in the Amor Criminal Proceeding, the court made a “judicial
determination” of the United States’ losses when it ordered him to pay restitution totaling
$1,900,000. Thus, he contends, that “amount is indeed res judicata” as to damages in this
case. (ECF No. 162 at 9). That contention lacks merit.
The Eleventh Circuit has recognized that “[a]n order of restitution is not a judicial
determination of damages. Damages measure the amount of compensable loss a victim
The fact that Amor is currently appealing his conviction is irrelevant to the preclusion
analysis. See, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Sun, 1997 WL 165331, at *2
(2d Cir. 1997) (“[A] pending appeal does not relieve a conviction of its preclusive effect.”).
Indeed, the parties previously stipulated that this action and the Amor Criminal Proceeding
arise from the “same general facts.” See, e.g., Joint Motion to Stay Civil Proceedings
Pending Final Resolution of Related Criminal Case (E.C.F. No. 84 at 6).
Because I conclude Amor is estopped from denying liability in this case, I need not
address the parties’ arguments as to whether Amor actually violated the FCA.
has suffered. Restitution, by contrast, is an equitable remedy, ‘subject to the general
equitable principle that [it] is granted to the extent and only to the extent that justice
between the parties requires.’” United States v. Barnette, 10 F. 3d 1553, 1556-57 (11th Cir.
1994) (citation omitted). In Barnette, the Eleventh Circuit declined to limit a damages
award in a civil FCA case to the amount of restitution awarded by the district court, noting
that the defendant’s attempt to equate the sentencing judge’s restitution order with a
determination of damages was “unpersuasive”. Barnette, 10 F.3d at 1556-57. The court
held that “[m]ore likely, the sentencing judge decided that the Government had lost at
least $7 million and that Barnette could pay that amount, but left final resolution of the
Government’s damages claim to the ensuing civil case.” Id. Although the sentencing court
in this case awarded restitution of $1,900,000, Barnette’s reasoning nevertheless directs that
a restitution finding in a criminal case does not foreclose the United States from seeking a
different damages award in a subsequent civil case. See id.
“FCA damages ‘typically are liberally calculated to ensure that they afford the
government complete indemnity for the injuries done it.’” United States ex rel. Doe v.
DeGregorio, 510 F. Supp. 2d 877, 890 (M.D. Fla. 2007) (quoting United States ex rel. Roby v.
Boeing Co., 302 F.3d 637, 646 (6th Cir. 2002)). While there is “no set formula for
determining the government’s actual damages” for an FCA claim, the Eleventh Circuit has
explained that, as a general rule, the “measure is ‘the difference between what the
government actually paid on the fraudulent claim and what it would have paid had’” it
known of the false statements. Anghaie, 633 F. App’x at 518 (quoting, United States v.
Killough, 848 F.2d 1523, 1532 (11th Cir. 1988)). Where, as here, the United States would
have paid out nothing to FastTrain but for its false claims and certifications, the proper
measure of damages is the full amount the United States paid out. See id. (citing United
States ex rel. Longhi v. United States, 575 F.3d 458, 461–62, 473 (5th Cir. 2009) (affirming
award of damages based on full amount of Government grant without offset)).11
According to the United States, the DOE paid out approximately $25,200,000 to
FastTrain during the 2010-2012 program years. That amount, if supported by the evidence,
would therefore be an accurate measure of single damages under the law. Within its
discretion, however, the United States requests that I limit the measure of damages to the
more modest amount of federal student aid FastTrain actually stole through its false claims
and false certifications. Testimony in the Amor Criminal Proceeding pegged that amount at
$4,129,765. See, e.g., Amor Criminal Proceeding, ECF No. 543 at 33-34. I find that amount to
be a reasonable, if not a conservative, estimate of the United States’ loss. See United States
ex rel. Doe, 510 F. Supp. at 890 (“The computation of damages does not have to be done
with mathematical precision but, rather, may be based upon a reasonable estimate of the
loss.”). Amor is therefore liable for $4,129,765, trebled, minus any restitution he pays to
3. Civil Penalties
Liability under the FCA also triggers the imposition of civil penalties. 31 U.S.C. §
3729(a) (a person liable under the FCA “is liable to the United States Government for a
civil penalty of not less than $[5,500] and not more than $[11,000]”); 28 C.F.R. § 85.3(a)(9)
(adjusting penalties for inflation). The civil penalty the Government is entitled to recover is
assessed for each false claim. 31 U.S.C. § 3729(a)(2). Thus, the number of violations of the
FCA depends on the number of false or fraudulent claims or other requests for payments
that defendant caused to be submitted.
See also United States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1279 (D.C. Cir. 2010)
(“[W]here the defendant fraudulently sought payments for participating in programs
designed to benefit third-parties rather than the government itself, the government can
easily establish that it received nothing of value from the defendant and that all payments
made are therefore recoverable as damages.”); United States v. Rogan, 517 F.3d 449, 453
(7th Cir. 2008) (affirming award of damages based on total amount that defendant
received from Government without offset); United States v. Mackby, 339 F.3d 1013, 1018-19
(9th Cir. 2003) (rejecting damages offset where the Government had received no asset of
Imposition of FCA treble damages and civil penalties does not, as Amor argues, violate
the Double Jeopardy Clause of the Fifth Amendment. See Karron, 750 F. Supp. 2d at 493
n.12 (collecting cases).
Amor signed, certified and submitted four PPAs to the DOE on behalf of FastTrain
during the 2010-2012 timeframe. (ECF No. 134-2 ¶ 2; ECF No. 302-1 at 17-20). Those
PPAs constituted false claims. Additionally, during the 2010-2012 program years, there
were 920 separate draw-downs associated with FastTrain in the DOE’s Grants
Management System (G-5). (ECF No. 134-1 ¶ 3). Each draw-down falsely certified
FastTrain’s compliance with DOE regulations. The United States argues that, given the
“egregious” nature of Amor’s conduct, I should impose the maximum penalty: a $11,000
fine for each of the 924 false claims. (ECF 131 at 19-20). I agree.
The student victims in this case were especially vulnerable. They were young
people who, for whatever reasons, had not graduated high school. Realizing there are few
jobs one can obtain without a high-school diploma or equivalent degree, they turned to
FastTrain, hoping to learn marketable skills to improve their chances of making a decent
living. FastTrain aggressively recruited these students, and then used fraud to make the
Government think they were eligible for federal aid and loans. FastTrain bilked the
Government out of millions of dollars, most of which ended up in Amor’s pockets. As for
the student victims, many now carry debt that will be enormously difficult to pay off with
what they can earn working the low-level jobs for which they are qualified. The effects of
Amor’s fraudulent acts are thus abhorrent and far-reaching.
In light of the seriousness of Amor’s misconduct, I find that the statutory maximum
fine of $11,000 for each of the 924 false claims is appropriate. See Cole v. U.S. Dep’t of Agric.,
A.S.C.S., 133 F.3d 803, 807 (11th Cir. 1998) (remedial penalties are not subject to excessive
fine scrutiny); United States v. NEC Corp., 11 F.3d 136, 137 (11th Cir. 1993) (qui tam
provisions are remedial penalties).
It is, therefore, ORDERED and ADJUDGED that Plaintiff the United States’
Motion for Summary Judgment (ECF No. 131) is GRANTED and Defendant Amor’s
Cross-Motion for Summary Judgment (ECF No. 141) is DENIED.
DONE and ORDERED in chambers at Miami, Florida, this 15th day of February
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge
Counsel of Record
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