Marinello Beauty Schools agrees to $11 million settlement in qui tam whistleblower lawsuit over fraudulent federal financial aid claims

by Charles Miller

A group of six whistleblowers who filed a qui tam lawsuit against Marinello Beauty Schools will receive $2.75-3.3 million as part of an $11 million settlement between the organization and the federal government. The lawsuit against Marinello accused the beauty school of defrauding the federal government by making false claims to obtain financial aid money from the Department of Education.

The Marinello School of Beauty was originally founded in 1905. Since then, the company has opened 56 schools nationwide, including campuses in California, Connecticut, Kansas, Massachusetts, Nevada, and Utah.

According to a whistleblower lawsuit filed by six former employees at Marinello, the company received financial aid payments from the federal government to help the schools enroll and train students, including $51 million in federal financial funds during the 2014-2015 academic year. The lawsuit alleged that in order to receive greater amounts of federal financial aid, Marinello falsified the high school diplomas of new students, encouraged new students to falsely report their income, and failed to provide some students with needed books and supplies despite receiving payments for them from the federal government.

After the six workers filed a whistleblower lawsuit against Marinello over its fraudulent actions, the school agreed to an $11 million settlement with the Department of Education. The six whistleblowers will receive 25-30% of the final settlement as stipulated in the False Claims Act, the law governing federal whistleblower lawsuits.

The Department of Education agreed to the $11 million settlement—far short of the total funds received by Marinello—in part because of how dependent the schools had become on federal financial aid payments in order to continue operations. Marinello Beauty Schools was forced to close all 56 of its locations nationwide as a result of the fraud allegations against the company.

Qui Tam Whistleblower Lawsuits Filed by Heygood, Orr & Pearson

Individuals who have been witness to acts of fraud against the government may be eligible to file a whistleblower lawsuit and receive a portion of the final settlement awarded to federal authorities. The first step in taking legal action is to speak with a law firm whose attorneys have the experience in handling qui tam litigation cases to guide you through the first steps in filing a lawsuit.

In cases where fraud against the government has occurred, the whistleblower who files the case does not have to have been personally harmed at all. They only need to have witnessed false or fraudulent conduct. Anyone who has information that a business or person has knowingly submitted a fraudulent claim to any branch of the government can potentially help file and pursue a lawsuit under the False Claims Act. If money is recovered in the form of a settlement or court judgment, the whistleblower could recover anywhere from 10% to 30% of the total amount awarded to the federal government.

For more information about filing a qui tam lawsuit, contact the lawyers at Heygood, Orr & Pearson for a free legal consultation regarding your case. You can reach us by calling toll-free at 1-877-446-9001, or by following the link to our free case evaluation form and answering a few simple questions to get started.


Case results depend upon a variety of factors unique to each case. Results of other cases do not guarantee or predict a similar result in any future case.

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by Charles Miller

Charles Miller is a licensed attorney and a partner at Heygood, Orr & Pearson. Charles focuses his practice on areas of complex commercial litigation and personal injury litigation.