Overview

• The complaint, filed in June 2024 by former VPs Dave Phillips and Ben Chaib, was unsealed after the Justice Department declined to intervene in May.
• Plaintiffs say the school engineered thousands of brief gigs to meet a 70% job-placement benchmark, including nearly $1 million paid to Ivar Music Group and others from 2010–2017 for two-day hires.
• The suit alleges executives misled Education Department auditors in 2017 and used illegal incentive compensation tied to student enrollment.
• LAFS is alleged to receive about $85 million annually in federal aid, while affiliated Full Sail University is cited at $377 million per year, underscoring the financial stakes.
• The school denies wrongdoing, cites a 2017–2020 federal probe and prior settlements with the plaintiffs, and argues the claims are time-barred and already resolved, with a dismissal motion forthcoming.