Two former instructors that have sued Kaplan Career Institute, ICM Campus, on behalf of the U.S. government, allege that the company fraudulently obtained federal funding by inflating its graduation and job placement statistics.

Victoria G. Gatsiopoulos and Dolores A. Howland originally filed the lawsuit, under the False Claims Act, in 2006. It was unsealed Tuesday.

Ms. Gatsiopoulos, who claims she was fired in December 2007 for blowing the whistle, also is seeking damages for lost wages, benefits and seniority at Kaplan.

Formerly known as the ICM School of Business & Medical Careers, the Kaplan ICM Campus is on Wood Street, Downtown. Georgia-based Kaplan Higher Education Corp. owns 70 such job training schools but is better known for its standardized test preparation programs.

The lawsuit alleges a slew of abuses by ICM that violated the Higher Education Act and earned federal funding in student financial aid.

According to the lawsuit, ICM inflated its statistics on graduates who accepted jobs in their designated or related fields in order to woo students and meet minimum benchmarks for federal funds.

The lawsuit claims that a graduate employed as a sales associate at Wal-Mart was categorized as working in "accounting management," that a telemarketer was categorized as working in "business administrative fashion merchandising," and that a McDonald's crew leader was categorized as working in "criminal justice." The Higher Education Act states that a school must place at least 70 percent of its students in related fields in order to be eligible for funds.

The lawsuit also alleges that ICM used deception to push its graduation numbers above the 70 percent minimum for federal funding. Ms. Gatsiopoulos, of Beechview, and Ms. Howland, of McKeesport, claim they were encouraged to falsely raise students' grades and mark them present when they were absent.

Ms. Gatsiopoulos and Ms. Howland complained to superiors about these tactics, the lawsuit alleges, but nothing was done.

When Ms. Gatsiopoulos was fired, ICM said it was eliminating her position, but the lawsuit alleges it was retaliation for her reports against the school.

The lawsuit also alleges that ICM went to extraordinary lengths, violating the Higher Education Act, to increase enrollment.

ICM would enroll students without checking their qualifications or criminal backgrounds, according to the lawsuit, and would compensate admissions officers who met enrollment quotas with annual trips, including one to Puerto Rico in 2005.

The lawsuit also alleges that admissions officers made fantastical promises to prospective students, citing one who "was promised, in writing, by an Admissions Representative, that in five years she would have a job at a hospital, a big house in Florida, enough money to go to Disney World with her family, and a new Lexus."

The federal government is in the midst of investigating ICM, according to court filings, so it declined to intervene in the case for now.