Justice Department looking at DeVry recruiting

DeVry Inc., the provider of technical and college degrees, was accused of filing false statements to the government and will turn over documents on recruiter pay and performance to the Justice Department civil division.

The department requested documents "and other information" from DeVry earlier this month after receiving allegations the company may have submitted false claims or statements to the U.S. Education Department, DeVry, based in Oakbrook Terrace, said in a statement today. The company doesn't know who made the allegations and believes it did nothing wrong, said Bill Strong, a company spokesman.

For-profit colleges are barred from awarding bonuses to recruiters based on the number of students they enroll, said Alexander Paris Jr., an analyst at Barrington Research Associates Inc. in Chicago, who recommends buying DeVry. In 2004, Apollo Group Inc., operator of the University of Phoenix, paid $9.8 million to settle a U.S. Education Department investigation into recruitment bonuses .

"It has happened a dozen times over the last decade or so among various different for-profit education companies," said Paris. "DeVry has been remarkable in that it has had the least number of regulatory run-ins among the publicly traded education companies."

DeVry fell $1.39, or 2.5 percent, to $55.28 at 1:41 p.m. in New York Stock Exchange composite training after dipping as much as 9.8 percent earlier, the most since March 28. The stock climbed 6 5 percent in the 12 months before today.

DeVry got 70 percent of its 2006 revenue for U.S. undergraduate programs from students receiving funding from the U.S. through grants, loans and work-study programs, the company said in a regulatory filing.

DeVry has told the U.S. Attorney's office in Chicago it will cooperate with the probe, Strong said. The U.S. Attorney won't comment, said Randall Samborn, a spokesman for the office. A spokeswoman for the U.S. Education Department didn't return a phone call.

DeVry, which had revenue of $933.5 million in the fiscal year ended June 30, operates DeVry University, Ross University, and Chamberlain College of Nursing. DeVry also operates Advanced Academics, which provides online secondary education.