This is the first time the government has intervened in the student recruitment practices at for-profit colleges, which have come under fire recently in multiple lawsuits across the country for their sales practices, student-loan defaults and job placement claims. 

For-profit colleges receive as much as 90 percent of their revenue from federal financial aid. The government, in most cases, forbids such incentive compensation for colleges accepting federal aid because of concern the practice will encourage companies to enroll unqualified students just to receive more federal money. 

Education Management, the second-largest U.S. operator of for-profit colleges, operates Argosy University, South University Brown Mackie Colleges, and the Art Institute chain. The company was hit with a similar whistleblower lawsuit last year for paying its student recruiters at South University Online based on how many students they drummed up. The Justice Department decline to intervene in that case.

In whistleblower, or qui tam, lawsuits, private citizens file fraud complaints on behalf of the federal government. If the government joins a case, the whistleblower may get 15 percent to 25 percent of any money recovered.

At least 27 whistleblower lawsuits have been filed against for-profit colleges under the False Claims Act since the 1990s, primarily alleging violations of federal incentive- compensation rules. The Justice Department declined to join all 27 cases, except for one, which it joined based on a separate charge. This shows just how rare it is that the DOJ joined the current case against Education Management.

The case, which is still under court seal, is titled U.S. v. Education Management, 07-cv-00461, U.S. District Court, Western District of Pennsylvania (Pittsburgh).