United States v. Study Across The Pond, LLC, 1:21-cv-10274

The U.S. government alleges that Study Across the Pond, LLC (SATP) and its CEO John Borhaug caused U.K. higher education institutions participating in federal student aid programs to submit false claims to the Department of Education, violating the False Claims Act (FCA).
SATP provided recruitment, marketing, and other services to U.K. universities, receiving commissions tied to tuition payments for enrolled U.S. students.
Institutions are required by Title IV of the Higher Education Act (HEA) and its Incentive Compensation Ban (ICB) not to pay commissions based on enrollment success; exceptions exist for 'bundled services providers' under certain circumstances.
The government asserts that SATP was not a true bundled services provider and that some contracts and fee arrangements were sham attempts to disguise prohibited commissions as marketing fees.
Defendants moved to dismiss the complaint, raising arguments including factual insufficiency, lack of causation, vagueness of the regulatory guidance, and lack of scienter and materiality; the government opposed.
The matter is before the District of Massachusetts on a motion to dismiss, testing whether the government has sufficiently pled FCA violations and an unjust enrichment claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claims/statements were made under FCA	SATP caused clients to submit claims for federal funds after certifying compliance with ICB	SATP did not directly submit claims; insufficient factual connection	For Plaintiff: claim existence sufficiently alleged
Whether claims/statements were false (ICB violation/Bundled Services Provider status)	SATP was not a bona fide Bundled Services Provider and structured agreements to circumvent ICB	SATP qualifies as Bundled Services Provider; guidance is vague	For Plaintiff: sufficient facts alleged at this stage
Whether Defendants caused submission of false claims/statements	SATP knowingly influenced clients via contract language and assurances to submit false claims	Plaintiff failed to tie SATP's conduct to specific false claims/statements	For Plaintiff: causation sufficiently alleged at pleading stage
Whether scienter (knowingly) and materiality were sufficiently pled	Internal emails, scheming, and covering with language show knowledge and recklessness; ICB compliance central to payment	SATP believed it was compliant and did not know which clients used Title IV; continued payment negates materiality	For Plaintiff: sufficient at this stage; materiality and scienter plausibly pled
Whether unjust enrichment claim is viable	Equitable relief for government as alternative to FCA damages	Redundant of FCA claim; barred where legal remedy available	For Defendant: dismissed as duplicative of FCA claim

Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility in civil actions)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (complaints must state more than labels and conclusions)
Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176 (FCA pleading with particularity; materiality standard)
Sessions v. Dimaya, 584 U.S. 148 (scope of vagueness doctrine in civil cases)
Grayned v. City of Rockford, 408 U.S. 104 (due process and void for vagueness standard)
United States v. Lachman, 387 F.3d 42 (define 'knowing' and scienter required for FCA)
United States v. Educ. Mgmt. Corp., 871 F. Supp. 2d 433 (incentive compensation ban context and scope)