PREETBHARARA United States Attorney for the Southern District of New York
By HEIDI AWENDEL
1MARA E TRAGER
~---1
Assistant United States Attorneys i 86 Chambers Street Third Floor 26 r i New York New York 10007 I
ITel (212) 637-26362799 Fax (212) 637-2686 Email heidi wende Iusdojgov mara tragerusdojgov
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA ex rei GURUMURTHY KAL Y ANA RAM and STA TE OF NEW YORK ex reI GURUMURTHY KALYANARAM
Plaintiffs
-v-
NEW YORK INSTITUTE OF TECHNOLOGY ELLIS COLLEGE OF NEW YORK INSTITUTE OF TECHNOLOGY CARDEAN LEARNING GROUP LLC UNEXT INC and UNEXT LLC
Defendants
UNITED STATES OF AMERICA
Plaintiff-Intervenor
-v-
NEW YORK INSTITUTE OF TECHNOLOGY ELLIS COLLEGE OF NEW YORK INSTITUTE OF TECHNOLOGY CARDEAN LEARNING GROUP LLC UNEXT INC and UNEXTCOM LLC fkla UNEXT LLC
Defendants
STIPULATION AND ORDER OF SETTLEMENT AND DISMISSAL AS TO DEFENDANT CARDEAN LEARNING GROUP LLC
07 Civ 9307 (JFK) (AlP)
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 1 of 16
WHEREAS this Stipulation and Order of Settlement and Dismissal (the Stipulation or
Agreement) is entered into among the United States of America by its attorney Preet Bharara
United States Attorney for the Southern District of New York (the United States) Defendant
Cardean Learning Group LLC (formerly known as UNextcom LLC) and UNext Inc
(collectively referred to as Cardean) and Gurumurthy Kalyanaram (Relator) through their
authorized representatives
WHEREAS New York Institute of Technology (NYIT) is a private non-profit
university with over 14000 students in seven colleges and schools
WHEREAS Ellis College of NYIT (Ellis College) was founded in 2003 pursuant to an
agreement between NYIT UNext Inc and UNextcom LLC (later known as Cardean Learning
Group LLC) to offer exclusively online courses
WHEREAS NYIT is a participant in the federally-funded student loan and grant
programs administered by the United States Department of Education (USED)
WHEREAS Cardean Learning Group LLC is a privately-held limited liability company
organized under the laws of the State of Delaware During the relevant time period Cardean
Learning Group LLC developed and provided to NYIT graduate business and management
programs including an online MBA program as well as student recruitment services pursuant to
its contract with NYIT
WHEREAS on October 172007 Relator filed a qui tam action in the United States
District Court for the Southern District of New York captioned United States ofAmerica ex reI
Gurumurthy Kalyanaram and the State ofNew York ex reI Gurumurthy Kalyanaram against the
2
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 2 of 16
New York Institute oTechnology Ellis College oNew York Institute oTechnology Cardean
Learning Group LLC lJ1Yext Inc and Ulvexl LLC 07 Civ 9307 (JFK) pursuant to the qui tam
provisions of the False Claims Act 31 Usc sect 3730(b) (the Relators Action) The Relators
Action alleged inter alia that NYIT and Ellis College made incentive payments through
Cardean to recruiters to enroll students in violation of applicable laws rules and regulations
WHEREAS on September 202011 Relator filed a First Amended Qui Tam Complaint
amending the retaliation claim of the previously filed complaint
WHEREAS the United States has intervened in the Civil Action and has filed the
Complaint~in~Intervention of the United States of America (the Federal Complaint) alleging
that Defendants named in the Relators action knowingly violated the incentive compensation
ban prohibiting institutions that receive Title IV funds from providing any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any person or entities engaged in any student recruiting or admission activities or
in making decisions regarding the award of student financial assistance 20 USC
sect 1094(a)(20) (Incentive Compensation Ban)
WHEREAS Defendant Cardeans conduct as alleged in the Federal Complaint and
Relators First Amended Qui Tam Complaint shall be defined for purposes of this settlement as
the Covered Conduct
NOW THEREFORE to avoid the delay uncertainty inconvenience and expense of
protracted litigation of the above claims and in consideration of the mutual promises and
obligations of this StipUlation the United States Cardean and Relator (the Parties) agree and
3
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 3 of 16
covenant as follows
TERMS AND CONDITIONS
1 The Parties consent to this Courts exercise of subject matter jurisdiction over this
action and personal jurisdiction over each of them
2 Cardean Learning Group LLC admits acknowledges and accepts responsibility
for the following conduct alleged in the Federal Complaint
a During the relevant time period NYIT was a Title IV funding recipient eligible to
receive USED funding including student grants and loans
b As part of NY ITs obligations as a Title IV funding recipient NYIT agreed inter
alia that it would not provide or contract with any entity that provides any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any student recruiting or admissions activities
or in making decisions with regard to the awarding of student financial assistance
c In 2003 Cardean Learning Group LLC entered into a contract with NYIT to
provide inter alia recruitment services with respect to Ellis College including compliance with
the Incentive Compensation Ban
d From September 2003 to August 2008 Cardean Learning Group LLC used
recruiter compensation plans that included incentive compensation in the form of salary
adjustments more than two times in a twelve month period for certain employees providing
recruiting services for Ellis College and
e From September 2003 to August 2008 Cardean Learning Group LLC on certain
4
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 4 of 16
occasions compensated certain Ellis College recruiters with incentive payments in addition to
their regular salaries for among other things securing student enrollments for Ellis College
3 Cardean shall pay the United States a total of one million five hundred thousand
dollars ($] 50000000) (the Settlement Amount) for the loss claimed by the United States due
to the Covered Conduct Cardean shall make payment of the Settlement Amount by electronic
funds transfer within 30 days of the Effective Date pursuant to written instructions to be
provided by the United States Attorneys Office for the Southern District of New York
4 Conditioned upon Cardeans payment of the Settlement Amount the United
States releases Cardean and all of its current and former officers directors trustees
shareholders members employees affiliates servants agents and assigns from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act 31 USC sectsect 3729-3733 the Contract Disputes Act (41 USC sect60 I et seq) the
Program Fraud Civil Remedies Act 31 USC sectsect 3801-3812 the Civil Monetary Penalties Law
42 U SC sect 1320a-7a and the common law or equitable theories of fraud payment by mistake
negligence breach of contract and unjust enrichment The United States shall seek the
simultaneous filing and dismissal with prejudice of the Federal Complaint as against Cardean as
well as the dismissal with prejudice of Relators First Amended Qui Tam Complaint as against
Cardean
5 Contingent upon and following payment by Cardean pursuant to the terms of the
Settlement Agreement the United States agrees to pay the Relator twenty percent (20) of the
payment (the Relators Share) from the Settlement Amount according to written instructions
5
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 5 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
WHEREAS this Stipulation and Order of Settlement and Dismissal (the Stipulation or
Agreement) is entered into among the United States of America by its attorney Preet Bharara
United States Attorney for the Southern District of New York (the United States) Defendant
Cardean Learning Group LLC (formerly known as UNextcom LLC) and UNext Inc
(collectively referred to as Cardean) and Gurumurthy Kalyanaram (Relator) through their
authorized representatives
WHEREAS New York Institute of Technology (NYIT) is a private non-profit
university with over 14000 students in seven colleges and schools
WHEREAS Ellis College of NYIT (Ellis College) was founded in 2003 pursuant to an
agreement between NYIT UNext Inc and UNextcom LLC (later known as Cardean Learning
Group LLC) to offer exclusively online courses
WHEREAS NYIT is a participant in the federally-funded student loan and grant
programs administered by the United States Department of Education (USED)
WHEREAS Cardean Learning Group LLC is a privately-held limited liability company
organized under the laws of the State of Delaware During the relevant time period Cardean
Learning Group LLC developed and provided to NYIT graduate business and management
programs including an online MBA program as well as student recruitment services pursuant to
its contract with NYIT
WHEREAS on October 172007 Relator filed a qui tam action in the United States
District Court for the Southern District of New York captioned United States ofAmerica ex reI
Gurumurthy Kalyanaram and the State ofNew York ex reI Gurumurthy Kalyanaram against the
2
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 2 of 16
New York Institute oTechnology Ellis College oNew York Institute oTechnology Cardean
Learning Group LLC lJ1Yext Inc and Ulvexl LLC 07 Civ 9307 (JFK) pursuant to the qui tam
provisions of the False Claims Act 31 Usc sect 3730(b) (the Relators Action) The Relators
Action alleged inter alia that NYIT and Ellis College made incentive payments through
Cardean to recruiters to enroll students in violation of applicable laws rules and regulations
WHEREAS on September 202011 Relator filed a First Amended Qui Tam Complaint
amending the retaliation claim of the previously filed complaint
WHEREAS the United States has intervened in the Civil Action and has filed the
Complaint~in~Intervention of the United States of America (the Federal Complaint) alleging
that Defendants named in the Relators action knowingly violated the incentive compensation
ban prohibiting institutions that receive Title IV funds from providing any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any person or entities engaged in any student recruiting or admission activities or
in making decisions regarding the award of student financial assistance 20 USC
sect 1094(a)(20) (Incentive Compensation Ban)
WHEREAS Defendant Cardeans conduct as alleged in the Federal Complaint and
Relators First Amended Qui Tam Complaint shall be defined for purposes of this settlement as
the Covered Conduct
NOW THEREFORE to avoid the delay uncertainty inconvenience and expense of
protracted litigation of the above claims and in consideration of the mutual promises and
obligations of this StipUlation the United States Cardean and Relator (the Parties) agree and
3
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 3 of 16
covenant as follows
TERMS AND CONDITIONS
1 The Parties consent to this Courts exercise of subject matter jurisdiction over this
action and personal jurisdiction over each of them
2 Cardean Learning Group LLC admits acknowledges and accepts responsibility
for the following conduct alleged in the Federal Complaint
a During the relevant time period NYIT was a Title IV funding recipient eligible to
receive USED funding including student grants and loans
b As part of NY ITs obligations as a Title IV funding recipient NYIT agreed inter
alia that it would not provide or contract with any entity that provides any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any student recruiting or admissions activities
or in making decisions with regard to the awarding of student financial assistance
c In 2003 Cardean Learning Group LLC entered into a contract with NYIT to
provide inter alia recruitment services with respect to Ellis College including compliance with
the Incentive Compensation Ban
d From September 2003 to August 2008 Cardean Learning Group LLC used
recruiter compensation plans that included incentive compensation in the form of salary
adjustments more than two times in a twelve month period for certain employees providing
recruiting services for Ellis College and
e From September 2003 to August 2008 Cardean Learning Group LLC on certain
4
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 4 of 16
occasions compensated certain Ellis College recruiters with incentive payments in addition to
their regular salaries for among other things securing student enrollments for Ellis College
3 Cardean shall pay the United States a total of one million five hundred thousand
dollars ($] 50000000) (the Settlement Amount) for the loss claimed by the United States due
to the Covered Conduct Cardean shall make payment of the Settlement Amount by electronic
funds transfer within 30 days of the Effective Date pursuant to written instructions to be
provided by the United States Attorneys Office for the Southern District of New York
4 Conditioned upon Cardeans payment of the Settlement Amount the United
States releases Cardean and all of its current and former officers directors trustees
shareholders members employees affiliates servants agents and assigns from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act 31 USC sectsect 3729-3733 the Contract Disputes Act (41 USC sect60 I et seq) the
Program Fraud Civil Remedies Act 31 USC sectsect 3801-3812 the Civil Monetary Penalties Law
42 U SC sect 1320a-7a and the common law or equitable theories of fraud payment by mistake
negligence breach of contract and unjust enrichment The United States shall seek the
simultaneous filing and dismissal with prejudice of the Federal Complaint as against Cardean as
well as the dismissal with prejudice of Relators First Amended Qui Tam Complaint as against
Cardean
5 Contingent upon and following payment by Cardean pursuant to the terms of the
Settlement Agreement the United States agrees to pay the Relator twenty percent (20) of the
payment (the Relators Share) from the Settlement Amount according to written instructions
5
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 5 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
New York Institute oTechnology Ellis College oNew York Institute oTechnology Cardean
Learning Group LLC lJ1Yext Inc and Ulvexl LLC 07 Civ 9307 (JFK) pursuant to the qui tam
provisions of the False Claims Act 31 Usc sect 3730(b) (the Relators Action) The Relators
Action alleged inter alia that NYIT and Ellis College made incentive payments through
Cardean to recruiters to enroll students in violation of applicable laws rules and regulations
WHEREAS on September 202011 Relator filed a First Amended Qui Tam Complaint
amending the retaliation claim of the previously filed complaint
WHEREAS the United States has intervened in the Civil Action and has filed the
Complaint~in~Intervention of the United States of America (the Federal Complaint) alleging
that Defendants named in the Relators action knowingly violated the incentive compensation
ban prohibiting institutions that receive Title IV funds from providing any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any person or entities engaged in any student recruiting or admission activities or
in making decisions regarding the award of student financial assistance 20 USC
sect 1094(a)(20) (Incentive Compensation Ban)
WHEREAS Defendant Cardeans conduct as alleged in the Federal Complaint and
Relators First Amended Qui Tam Complaint shall be defined for purposes of this settlement as
the Covered Conduct
NOW THEREFORE to avoid the delay uncertainty inconvenience and expense of
protracted litigation of the above claims and in consideration of the mutual promises and
obligations of this StipUlation the United States Cardean and Relator (the Parties) agree and
3
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 3 of 16
covenant as follows
TERMS AND CONDITIONS
1 The Parties consent to this Courts exercise of subject matter jurisdiction over this
action and personal jurisdiction over each of them
2 Cardean Learning Group LLC admits acknowledges and accepts responsibility
for the following conduct alleged in the Federal Complaint
a During the relevant time period NYIT was a Title IV funding recipient eligible to
receive USED funding including student grants and loans
b As part of NY ITs obligations as a Title IV funding recipient NYIT agreed inter
alia that it would not provide or contract with any entity that provides any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any student recruiting or admissions activities
or in making decisions with regard to the awarding of student financial assistance
c In 2003 Cardean Learning Group LLC entered into a contract with NYIT to
provide inter alia recruitment services with respect to Ellis College including compliance with
the Incentive Compensation Ban
d From September 2003 to August 2008 Cardean Learning Group LLC used
recruiter compensation plans that included incentive compensation in the form of salary
adjustments more than two times in a twelve month period for certain employees providing
recruiting services for Ellis College and
e From September 2003 to August 2008 Cardean Learning Group LLC on certain
4
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 4 of 16
occasions compensated certain Ellis College recruiters with incentive payments in addition to
their regular salaries for among other things securing student enrollments for Ellis College
3 Cardean shall pay the United States a total of one million five hundred thousand
dollars ($] 50000000) (the Settlement Amount) for the loss claimed by the United States due
to the Covered Conduct Cardean shall make payment of the Settlement Amount by electronic
funds transfer within 30 days of the Effective Date pursuant to written instructions to be
provided by the United States Attorneys Office for the Southern District of New York
4 Conditioned upon Cardeans payment of the Settlement Amount the United
States releases Cardean and all of its current and former officers directors trustees
shareholders members employees affiliates servants agents and assigns from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act 31 USC sectsect 3729-3733 the Contract Disputes Act (41 USC sect60 I et seq) the
Program Fraud Civil Remedies Act 31 USC sectsect 3801-3812 the Civil Monetary Penalties Law
42 U SC sect 1320a-7a and the common law or equitable theories of fraud payment by mistake
negligence breach of contract and unjust enrichment The United States shall seek the
simultaneous filing and dismissal with prejudice of the Federal Complaint as against Cardean as
well as the dismissal with prejudice of Relators First Amended Qui Tam Complaint as against
Cardean
5 Contingent upon and following payment by Cardean pursuant to the terms of the
Settlement Agreement the United States agrees to pay the Relator twenty percent (20) of the
payment (the Relators Share) from the Settlement Amount according to written instructions
5
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 5 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
covenant as follows
TERMS AND CONDITIONS
1 The Parties consent to this Courts exercise of subject matter jurisdiction over this
action and personal jurisdiction over each of them
2 Cardean Learning Group LLC admits acknowledges and accepts responsibility
for the following conduct alleged in the Federal Complaint
a During the relevant time period NYIT was a Title IV funding recipient eligible to
receive USED funding including student grants and loans
b As part of NY ITs obligations as a Title IV funding recipient NYIT agreed inter
alia that it would not provide or contract with any entity that provides any commission bonus
or other incentive payment based directly or indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any student recruiting or admissions activities
or in making decisions with regard to the awarding of student financial assistance
c In 2003 Cardean Learning Group LLC entered into a contract with NYIT to
provide inter alia recruitment services with respect to Ellis College including compliance with
the Incentive Compensation Ban
d From September 2003 to August 2008 Cardean Learning Group LLC used
recruiter compensation plans that included incentive compensation in the form of salary
adjustments more than two times in a twelve month period for certain employees providing
recruiting services for Ellis College and
e From September 2003 to August 2008 Cardean Learning Group LLC on certain
4
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 4 of 16
occasions compensated certain Ellis College recruiters with incentive payments in addition to
their regular salaries for among other things securing student enrollments for Ellis College
3 Cardean shall pay the United States a total of one million five hundred thousand
dollars ($] 50000000) (the Settlement Amount) for the loss claimed by the United States due
to the Covered Conduct Cardean shall make payment of the Settlement Amount by electronic
funds transfer within 30 days of the Effective Date pursuant to written instructions to be
provided by the United States Attorneys Office for the Southern District of New York
4 Conditioned upon Cardeans payment of the Settlement Amount the United
States releases Cardean and all of its current and former officers directors trustees
shareholders members employees affiliates servants agents and assigns from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act 31 USC sectsect 3729-3733 the Contract Disputes Act (41 USC sect60 I et seq) the
Program Fraud Civil Remedies Act 31 USC sectsect 3801-3812 the Civil Monetary Penalties Law
42 U SC sect 1320a-7a and the common law or equitable theories of fraud payment by mistake
negligence breach of contract and unjust enrichment The United States shall seek the
simultaneous filing and dismissal with prejudice of the Federal Complaint as against Cardean as
well as the dismissal with prejudice of Relators First Amended Qui Tam Complaint as against
Cardean
5 Contingent upon and following payment by Cardean pursuant to the terms of the
Settlement Agreement the United States agrees to pay the Relator twenty percent (20) of the
payment (the Relators Share) from the Settlement Amount according to written instructions
5
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 5 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
occasions compensated certain Ellis College recruiters with incentive payments in addition to
their regular salaries for among other things securing student enrollments for Ellis College
3 Cardean shall pay the United States a total of one million five hundred thousand
dollars ($] 50000000) (the Settlement Amount) for the loss claimed by the United States due
to the Covered Conduct Cardean shall make payment of the Settlement Amount by electronic
funds transfer within 30 days of the Effective Date pursuant to written instructions to be
provided by the United States Attorneys Office for the Southern District of New York
4 Conditioned upon Cardeans payment of the Settlement Amount the United
States releases Cardean and all of its current and former officers directors trustees
shareholders members employees affiliates servants agents and assigns from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act 31 USC sectsect 3729-3733 the Contract Disputes Act (41 USC sect60 I et seq) the
Program Fraud Civil Remedies Act 31 USC sectsect 3801-3812 the Civil Monetary Penalties Law
42 U SC sect 1320a-7a and the common law or equitable theories of fraud payment by mistake
negligence breach of contract and unjust enrichment The United States shall seek the
simultaneous filing and dismissal with prejudice of the Federal Complaint as against Cardean as
well as the dismissal with prejudice of Relators First Amended Qui Tam Complaint as against
Cardean
5 Contingent upon and following payment by Cardean pursuant to the terms of the
Settlement Agreement the United States agrees to pay the Relator twenty percent (20) of the
payment (the Relators Share) from the Settlement Amount according to written instructions
5
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 5 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
provided by Relators counsel David Koenigsberg Cardean has separately entered into an
agreement to address the payment of Relators attorneys fees and costs with respect to the
matters being settled by this Agreement
6 In agreeing to accept payment of the Relators Share Relator for himself and his
heirs successors attorneys agents and assigns will release and will be deemed to have released
and forever discharged the United States its officers agents and employees from any claims
pursuant to 31 USC sect 3730 and for a share of the US Settlement Amount and from any
claims against the United States arising from or relating to the filing of the Civil Action and the
Federal Complaint
7 Relator for himself and for his heirs executors administrators personal
representatives family members successors attorneys agents and assigns releases and forever
discharges Cardean and all of its current and former officers directors trustees shareholders
members employees affiliates servants agents and assigns (lithe Released Parties) from any
and all manner of claims proceedings and causes of action of any kind or description
whatsoever known or unknown contingent or accrued that Relator andor his heirs executors
administrators and assigns have against the Released Parties arising out of or by reason of any
cause matter thing fact circumstance event or agreement whatsoever occurring prior to the
execution of this Agreement relating to or arising out of Relators First Amended Qui Tam
Complaint or the Federal Complaint Relator and his heirs successors attorneys agents and
assigns shall not object to this Agreement but agree and confirm that this Agreement is fair
adequate and reasonable under all the circumstances pursuant to 31 USc sect 3730(c)(2)(B)
6
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 6 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
Nothing herein shall be construed as releasing NYIT from Relators claims for retaliation under
31 USc sect 3730(h) andor NY State Finance Law sect 191 (I) and any claims that are the subject
of the action entitled Kalyanaram v NYIT Index No 1090412010 (NY Supreme Court)
8 Notwithstanding the releases given in Paragraph 4 or any other paragraph of this
Stipulation the following claims of the United States are specifically reserved and are not
released
a Any liability arising under Title 26 US Code (Internal Revenue Code)
b Any criminal liability
c Except as explicitly stated in this Agreement any administrative liability
including suspension and debannent rights of any federal agency
d Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct and
e Any liability based upon obligations created by this Stipulation
9 Cardean shall be in default of this Stipulation if it fails to make the payment set
forth in paragraph 3 on or before its due date The United States will provide written notice of
any default to be sent by email andfirst-c1assmailtotheundersignedattorneysforCardeanIn
the event of default the entire remaining unpaid Settlement Amount shall be immediately due
and payable by Cardean and interest shall accrue at the rate of 12 per annum compounded
daily on the remaining unpaid principal balance beginning seven (7) business days after delivery
of the notice of default If the Settlement Amount with all accrued interest is not paid in full
within seven (7) business days after delivery of the notice of defau It Cardean shall agree to a
7
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 7 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
Consent Judgment against Cardean in the amount of the unpaid balance and the United States at
its option may (a)rescind this Stipulation and reinstate the Federal Complaint filed in this action
as to Cardean or seek specific performance of the Stipulation (b) onset the remaining unpaid
balance from any amounts due and owing Cardean by any department agency or agent of the
United States at the time of default or (c) exercise any other rights granted by law or under the
terms of this Agreement or recognizable at common law or in equity Cardean shall not contest
any offset imposed or any collection action undertaken by the United States pursuant to this
paragraph either administratively or in any State or Federal court In addition Cardean shall pay
the United States all reasonable costs of collection and enforcement under this paragraph
including attorneys fees and expenses In the event that the United States opts to rescind this
Stipulation pursuant to this paragraph Cardean shall not plead argue or otherwise raise any
defenses under the theories of statute of limitations laches estoppel or similar theories to any
civil or administrative claims which relate to the Covered Conduct
10 Cardean waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution or under the Excessive Fines Clause in the Eighth Amendment of the Constitution
this Stipulation bars a remedy sought in such criminal prosecution or administrative action
11 Nothing in this paragraph or any other provision of this Stipulation constitutes an
agreement by the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws Title 26 of the United States Code
8
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 8 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
12 Cardean fully and finally releases the United States and its agencies employees
servants and agents from any claims (including attorneys fees costs and expenses of every kind
and however denominated) that Cardean has asserted could have asserted or may assert in the
future against the United States and its agencies employees servants and agents related to the
Covered Conduct and the United States investigation and prosecution thereof provided
however that nothing in this Stipulation shall absolve the Government from any obligation to
pay Cardean any amounts due under any grant cooperative agreement or contract awarded to
Cardean by the United States (Government Agreements) or prevent Cardean from seeking an
equitable adjustment or recovering on any claim for any amounts due to Cardean under any
Government Agreement except as otherwise provided by this Stipulation
13 Cardean fully and finally releases Relator and each of his heirs successors
attorneys agents and assigns from any claims (including attorneys fees costs and expenses of
every kind and however denominated) that Cardean has asserted or could have asserted or may
assert in the future against Relator and his heirs successors attorneys agents and assigns
relating to or arising out of Relators First Amended Qui Tam Complaint or the Federal
Complaint
14 Cardean agrees to the following
a Unallowable Costs Defined All costs (as defined in the Federal
Acquisition Regulation 48 CFR sect 31205-47 and in Titles XVIII and XIX of the Social
Security Act 42 USc sectsect 1395-1395kkk-1 and 1396-1 396w-5 and the regulations and official
program directives promulgated thereunder) incurred by or on behalf of Cardean their present or
9
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 9 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
former officers directors trustees employees and agents in connection with
(I) the matters covered by this Stipulation
(2) the United States audit(s) and civil and any criminal
investigation(s) of the matters covered by this Stipulation
(3) Cardeans investigation defense and corrective actions
undertaken in response to the United States audit(s) and civil and any criminal investigation(s)
in connection with the matters covered by this Stipulation (including attorneys fees)
(4) the negotiation and performance of this Stipulation and
(5) the payments made to the United States pursuant to this Stipulation
and any payments that Cardean or any of Cardeans present or former officers directors
trustees employees and agents make to Relator including for his costs and attorneys fees
b Future Treatment of Unallowable Costs Unallowable Costs shall be
separately determined and accounted for in nonreimbursable cost centers or categories by
Cardean and Cardean shall not charge such Unallowable Costs directly or indirectly to any
contracts with the United States
c Treatment of Unallowable Costs Previously Submitted for Payment
Within 90 days after the Effective Date of this Agreement Cardean shall identify and repay by
adjustment to future claims for payment or otherwise any Unallowable Costs included in
payments previously sought by Cardean or any of its subsidiaries or affiliates from the United
States Cardean agrees that the United States at a minimum shall be entitled to recoup from
Cardean any overpayment plus applicable interest and penalties as a result of the inclusion of
10
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 10 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
such Unallowable Costs on previously-submitted requests for payment The United States
including the Department of Justice andor the affected agencies reserves its rights to audit
examine or re-examine Cardeans books and records and to disagree with any calculations
submitted by Cardean or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Cardean or the effect of any such Unallowable Costs
on the amount of such payments
d Nothing in this Stipulation shall constitute a waiver of the rights of the
United States to audit examine or re-examine Cardeans books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this paragraph
e The United States reserves its right to disagree with any calculations
submitted by Cardean or the effect of inclusion of unallowable costs (as defined in this
paragraph) on Cardean or any of its subsidiaries or affil iates or the effect of inclusion of
Unallowable Costs (as defined in this paragraph) on Cardean or any of its subsidiaries or
affiliates cost reports cost statements or information reports (including CFRs and appeals)
15 Except as expressly provided to the contrary in this Stipulation this Stipulation is
intended to be for the benefit of the Parties only The Parties do not release any claims against
any other person or entity except as provided in paragraphs 46 7 12 and 13
16 This Stipulation is governed by the laws of the United States The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the United States District
Court for the Southern District of New York For purposes of construing this Stipulation this
Stipulation shall be deemed to have been drafted by all Parties to this Stipulation and shall not
I
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 11 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
therefore be construed against any Party for that reason in any subsequent dispute
17 Each party and signatory to this Stipulation represents that it freely and
voluntarily enters into this Stipulation without any degree of duress or compulsion
18 This Stipulation constitutes the complete agreement between the Parties This
Stipulation may not be amended except by written consent of the Parties
19 The undersigned counsel and other signatories represent and warrant that they are
fully authorized to execute this Stipulation on behalf of the persons and entities indicated below
20 This Stipulation may be executed in counterparts each of which constitutes an
original and all of which constitute one and the same Stipulation Facsimiles of signatures shall
constitute acceptable binding signatures for purposes of this Stipulation
21 Any failure by the United States to insist upon the strict performance of any of the
provisions of this StipUlation shall not be deemed a waiver of any of the provisions hereof and
the United States notwithstanding that failure shall have the right thereafter to insist upon strict
performance of any and all of the provisions of this Stipulation
22 Any notices pursuant to this Stipulation shall be in writing and shall unless
expressly provided otherwise herein be given by hand delivery express courier email or
facsimile transmission followed by postage-prepaid mail and shall be addressed as follows
TO THE UNITED STATES
Heidi A Wendel and Mara E Trager United States Attorneys Office Southern District of New York 86 Chambers Street 3rd Floor New York NY 10007 Tel (212) 637-26362799
12
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 12 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
TO DEFENDANT CARDEAN
Richard V Sandler Maron amp Sandler LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
TO RELATOR
David A Koenigsberg MENZ BONNER KOMAR amp KOENIGSBERG LLP 444 Madison A venue 39th Floor New York New York 10022 Telephone (212) 223-2100
23 The effective date of this Stipulation is the date upon which this Stipulation is
entered by this Court (the Effective Date)
THE UNITED STATES OF AMERICA
Dated New York New York ) December ~ 2012
PREET BHARARA United States Attorney for the Southern District of New York
Yt middot(4afQ~By HEIDI A WENDEL MARA E TRAGER Assistant United States Attorneys 86 Chambers Street 3rd floor New York New York 10007 Tel (212) 637-26362799 Fax (212) 637-2686
13
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 13 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
UNext Inc and UNe t LLC
~yensectA_~ MARON amp SANDLERLLP
CARDEAN LEARING GROUP INC UNEXT INC AND UNEXT LLC
Dated December 182012
RICHARD SANDLER Attorney for Defendant Cardean Learning Group Inc
By
1250 4 til Street Suite 550 Santa Monica CA 90401-1304 Tel (310) 570-4905
RELATOR
Dated December _ 2012
Gurumurthy Kalyanaram Relator
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 14 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
CARDEAN LEARfNG GROUP INC UNEXT fNC AND UNEXT LLC
Dated December 2012
RlCHARD SANDLER Attorney for Defendant Cardean Learning Group Inc UNext Inc and UNext LLC
By MARON amp SANDLER LLP 1250 4th Street Suite 550 Santa Monica CA 90401-1304 TeJ (310) 570-4905
RELATOR
Dated December t8 2012
14
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 15 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16
Dated New York ~w York December I D 2012
SO ORDERED
HONORABLE JOHN F KEENAN United States District Judge
MENZ BONNER KOMAR amp KOENIGSBERG LLP Attorneys for Relator
_~ttPl~By David A Koenig 444 Madison Avenue 39th Floor New York New York (0022 Tel (212) 2232 (00 Fax (212) 2232185
15
Case 107-cv-09307-JFK Document 36 Filed 122612 Page 16 of 16