Ultimate Medical Academy Lawsuit: Whistleblower Fraud and Title IV Probe

Ultimate Medical Academy has faced a range of legal and regulatory actions, including an open U.S. Department of Education investigation into its Title IV federal aid compliance, a 2011 whistleblower fraud lawsuit that was later dismissed, a software misappropriation suit that a federal appeals court sent back to Texas state court in 2022, and more recent employment and civil rights cases. The Tampa, Florida-based healthcare career college operates under provisional federal certification and has drawn sustained scrutiny over recruiting practices and a for-profit-to-nonprofit conversion that critics call an insider deal.

The Open Federal Investigation Into Title IV Compliance

The most consequential legal matter facing UMA is not a private lawsuit but a federal investigation. The U.S. Department of Education has stated that it “has opened an investigation into Ultimate Medical Academy’s compliance with Title IV, HEA requirements and regulations.”¹ The specific issues under review have not been made public.

UMA does not hold full federal certification. It operates under provisional certification with cash and financial monitoring, and its current Program Participation Agreement runs through March 31, 2027. Because it does not meet standard financial responsibility requirements, UMA must post financial protection — typically an irrevocable letter of credit — equal to at least 10 percent of the Title IV funds it received in the previous fiscal year.¹ The provisional status also requires UMA to report open investigations, legal proceedings, and negative government actions to the Department within 30 days.

A separate federal review between 2017 and 2019 found UMA in violation of federal financial aid disbursement rules tied to its relationship with a company called ed2go. The Department found UMA had held students’ high school diplomas until they enrolled at the academy.²

The 2011 Whistleblower Fraud Lawsuit

In 2011, former UMA employee Stephanie Onorati filed a federal qui tam whistleblower lawsuit alleging that the school had fraudulently obtained federal student aid. The U.S. Justice Department declined to intervene. The case was dismissed in 2012 by agreement of the parties. UMA said at the time that “the court dismissed the lawsuit claim in its entirety” and that the parties had agreed not to pursue further filings.³

The dismissal did not produce a finding of fraud. But the Onorati suit was part of a broader complaint pattern. According to the Tampa Bay Times, UMA drew 60 complaints to the Better Business Bureau and 11 complaints to the Florida Attorney General’s Office over a three-year period, with students citing harassment, aggressive enrollment tactics, misleading financial disclosures, and credentials they said held little value with employers.⁴

The Nonprofit Conversion at the Center of Fraud Concerns

Much of the ongoing scrutiny of UMA traces to a March 2015 transaction in which the Clinical and Patient Educators Association (CPEA), a small Denver-based nonprofit formed in 2010, acquired UMA and converted it from a for-profit to a nonprofit. The parties on both sides overlapped. UMA’s chief executive officer, Steven Kemler, sat on CPEA’s board at the time of the sale. CPEA’s chairman and president, Lowell Lifschultz, held a substantial ownership stake in UMA. IRS filings from 2013 showed that Lifschultz and Kemler collectively owned more than 50 percent of UMA’s membership interests, and the two organizations had engaged in a business transaction that year valued at nearly $400,000.³

Critics have characterized the deal as an insider transaction that let UMA maintain for-profit business practices under nonprofit status. Nonprofit status exempts a school from the federal “90/10 rule,” which caps the share of a for-profit college’s revenue that can come from federal financial aid at 90 percent. In the 2013–2014 academic year, federal aid accounted for roughly 87 percent of UMA’s total revenue, close to the ceiling.³ A 2020 Government Accountability Office report found that one-third of for-profit-to-nonprofit college conversions involve transactions that financially benefit former owners and insiders.²

Recruiting Allegations and the Trump University Connection

In 2016, investigative reporting revealed that several former Trump University executives held senior positions at UMA. David Highbloom, Trump University’s former chief operating officer, became UMA’s co-CEO in 2009. April Neumann, Trump University’s former director of operations, joined UMA in 2011 as vice president for corporate alliance and career services.⁴ Trump University was at that time defending fraud litigation brought by former students alleging deceptive sales practices.

UMA employees told reporters that management pressured them to use “high-pressure sales tactics” to enroll students, and prospective students complained about unsolicited recruiting calls. Allegations also surfaced that UMA operated “bait and switch” websites that advertised jobs rather than enrollment in a career college. After the reporting appeared, Kemler instructed employees not to speak with the media and to route inquiries to a spokesperson.⁵ UMA’s official response acknowledged that three employees had previously worked for Trump University but said none had worked at any Trump entity in the prior five years.⁴ Highbloom declined to comment. IRS filings show he transitioned from co-CEO to executive vice president around 2016 and no longer appeared in UMA’s tax filings as of the fiscal year ending in 2019.⁶

Other Active and Recent Lawsuits

Dynamic CRM Software Misappropriation Suit

Dynamic CRM Recruiting Solutions sued UMA over its 2019 licensing of the company’s recruiting software. The contract prohibited UMA from decompiling, reverse engineering, or attempting to derive the source code, and Dynamic CRM alleged UMA violated those terms.⁷ UMA tried to move the case to federal court. In April 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed that a forum selection clause required the dispute to be litigated in Harris County, Texas, district court.⁸ The Fifth Circuit did not rule on the merits of the misappropriation claims.

Lewis Wage and Hour Suit

A former UMA employee named Lewis filed a federal Fair Labor Standards Act lawsuit in the Middle District of Florida in August 2023. The parties filed a joint notice of settlement on November 3, 2023, and the court dismissed the action that same day.⁹ Settlement terms were not disclosed in the docket.

Harrison Civil Rights Suit

In July 2025, a pro se plaintiff named Daniel C. Harrison filed a civil rights suit against UMA and background check company Hire Image LLC in the U.S. District Court for the Northern District of Indiana. Court filings reference an email to Hire Image to correct a background report. In January 2026, the court dismissed several counts of the amended complaint and ordered Harrison to provide service information for UMA by a February deadline or risk UMA’s dismissal as a defendant.¹⁰ Court records indicate the case remained active as of mid-2026, with multiple motions pending.¹¹

What This Means for Former Students

At least 460 UMA students have filed “borrower defense to loan repayment” claims with the U.S. Department of Education, alleging they were misled or subjected to illegal practices.² Borrower defense is a federal administrative process, not a class action, and it is separate from any private litigation against UMA. Students who believe UMA misrepresented its programs, job prospects, or costs can submit a claim directly to the Department seeking discharge of their federal student loans; the pending federal investigation into UMA’s Title IV compliance is the regulatory track most likely to affect the outcome of those claims.

1
U.S. Department of Education. Ultimate Medical Academy Program Participation Agreement
2
American Federation of Teachers. Covert For-Profit Colleges
3
Republic Report. Ex-Trump University Executives Run College That Gets $150 Million From Taxpayers
4
Tampa Bay Times. Ex-Trump University Executives Are Now Guiding a Tampa Academy
5
Republic Report. College Staffed by Ex-Trump University Executives Tells Employees to Avoid the Media
6
ProPublica. UMA Education Inc. Nonprofit Explorer
7
Bloomberg Law. Medical Academy Must Face Software Theft Suit in Harris County
8
FindLaw. Dynamic CRM Recruiting Solutions v. UMA Education
9
CourtListener. Lewis v. UMA Education Inc.
10
Justia. Harrison v. Ultimate Medical Academy et al
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Leagle. Harrison v. Ultimate Medical Academy