UPDATE| Lacy School of Cosmetology owner ordered to pay back more than $9M

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Thursday, Feb. 18. 2016

COLUMBIA, S.C. (WRDW/WAGT)-- The United States District Court of South Carolina is asking anyone who attended any of the Lacy School of Cosmetology locations on a federal student loan to contact the U.S. Department of Education. You may be able to have your loan forgiven due to the outcome of the case against Earnest "Jay" Lacy, the President and CEO of The Lacy School of Cosmetology.



Wednesday, Feb. 17, 2016

COLUMBIA, S.C. (WRDW/WAGT) -- The United States District Court of South Carolina announced Wednesday a more than $9 million default judgement against Lacy School of Cosmetology and its owner in damages and statutory penalties.

Earnest "Jay" Lacy, the President and CEO of The Lacy School of Cosmetology, was ordered to pay $9,283,123 back for presenting false claims to the U.S. Department of Education for federal student loans and grants.

The release from the United States Attorney’s Office states Lacy owned four offices in South Carolina for The Lacy School of Cosmetology. The main campus is in Aiken and there are three others in Lexington, Goose Creek, and Charleston.

An investigation done by the federal government revealed the school had misappropriated funds by knowingly failing to comply with numerous federal program regulatory requirements, making unauthorized disbursements of federal student aid funds, failing to refund student credit balances, and concealing its actions by submitting false statements of compliance, according to the release from the United States Attorney’s Office.

The U.S. Attorney's Office said a whistleblower notified federal authorities of the illegal practices.

The damages and statutory penalties include $2,078,448 in Pell Grants and $106,593 in federally backed student loans. Then, the False Claims Act requires those damages to be tripled for a total amount of $6,555,123. A civil penalty of $2,728,000 was also imposed under the False Claims Act which imposes a penalty per violation.

This was issued in December 2015, but Lacy had 60-days to appeal the judgment.