Franklin Towne Charter High School and Its Former CEO Agree to Pay Nearly $4 Million to Resolve Claim of Racial Discrimination in Admissions Process

PHILADELPHIA - United States Attorney David Metcalf announced today that Franklin Towne Charter High School ("Franklin Towne"), a public charter high school in Philadelphia, and its former CEO Joseph Venditti have separately agreed to pay a total of $3,914,328.77 to resolve claims that they violated the False Claims Act by discriminating against black applicants during a January 2023 admissions lottery.

"Racial discrimination has no place in school admissions," said U.S. Attorney Metcalf. "Selecting or excluding students because of their race is illegal and violates the agreements schools sign when they accept federal grant money."

Title VI of the Civil Rights Act of 1964 and United States Department of Education regulations prohibit any school that receives federal financial assistance from discriminating based on race, color, or national origin during the admissions process or otherwise.

The United States contends that, in January 2023, Franklin Towne, acting through or at the behest of Venditti, manipulated what should have been a random admissions lottery to reduce the chances of black applicants being admitted. At the time of the lottery, Franklin Towne was funded in part by grants that were provided by the United States Department of Education and administered by the Commonwealth of Pennsylvania pursuant to the Elementary and Secondary Education Act and the Elementary and Secondary School Emergency Relief Fund.

The settlement amounts with both defendants were based on analyses of their abilities to pay. Franklin Towne will pay $3,639,328.77 as part of its settlement agreement and Venditti will pay $275,000.00 as part of his settlement agreement.

As part of the settlement agreement with Franklin Towne, the United States acknowledges, pursuant to the Department of Justice's Guidelines for Taking Voluntary Disclosure, Cooperation and Remediation into Account in False Claims Act Matters (Justice Manual § 4.4.112), that the school has made significant governance changes, including replacing the Chief Executive Officer and hiring an independent third party to conduct all future admissions lotteries at the school.

"I am proud of the work of OIG staff, and our law enforcement and prosecutorial partners whose efforts brought about this settlement," said Jamila Davis, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Eastern Regional Office. "The OIG will continue to pursue allegations of violations of the False Claims Act in carrying out our important public service."

This matter was handled in the Eastern District of Pennsylvania by Assistant United States Attorneys Peter Carr and Fernando I. Rivera, with assistance from litigative consultant Denis Cooke.

The claims resolved by the settlement are allegations only and there has been no determination of liability.