According to legal documents by the United States Department of Justice, released on Dec. 19, Marymount Manhattan College was ordered to pay $8,392,758.43 to “resolve allegations that it violated the False Claims Act by falsely certifying that it was eligible for a Paycheck Protection Program (“PPP”) loan.”
The case, which was brought to the government by an anonymous whistleblower lawsuit, accused MMC of false claims. Marymount Manhattan has “admitted and accepted responsibility for conduct alleged in the Government’s Complaint, including that it was ineligible to receive the PPP loan due to the total number of individuals it employed.”
The Paycheck Protection Program (“PPP”) was a post-COVID loan program enacted by the U.S. Small Business Administration meant to ease the strain of financial burden from small businesses with 500 or fewer employees. The document stated that “MMC exceeded this size eligibility requirement.” During the application for the PPP loan, Marymount’s authorized representative indicated that the college employed only 482 employees. The courts later verified that MMC had upward 800 employees employed at the time of the application. The document states that MMC’s part-time employees were counted as only one-third of an employee in the 482 count. According to the college’s LinkedIn, it currently employs over 1,000 employees.
In May of 2020, Marymount Manhattan’s representative applied for a PPP loan. The PPP loan official eligibility requirements cite “the Borrower Application Form requires PPP applicants to certify that ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.’” MMC was granted $6,555,592.00. In June of 2021, the representative applied for loan forgiveness and $6,197,696.64 of the PPP loan was forgiven. Again, during the loan forgiveness application employee counts were misappropriated.
In 2020, according to Marymount Manhattan’s public tax documents, the college, despite COVID strains, ended with a net-positive with an $18,265,957 net income and a total revenue of $102,629,216. The previous year MMC had a net income of only $1,576,385, making 2020 the college’s strongest year in terms of net income in history. Additionally, Kerry Walk, the previous President of MMC, was paid $426,761with additional non-taxable benefits adding up to $106,351 in 2020. The total administrative compensation for the 15 payable administrative employees was $2,153,713 in 2020.
After 2020, Marymount Manhattan continued to remain net-positive with income fluctuating between $6.5 million and $13.2 million in 2021 and 2022. However, in 2023 Marymount ended the year with a deficit of over $5 million.
In 2023 MMC paid $1.3 million to victims of a cyber security leak in a class action lawsuit settlement. The cyber security leak, which occurred in November of 2021, resulted in the information of 191,752 individuals’ data being held ransom by a hacker. MMC paid a ransome to the hacker group and was ordered by Attorney General James to invest $3.5 million in cyber security.
It was only a few months after that Marymount announced its trustees decision to merge with Northeastern University. Although various aspects impacted the trustees decision, one of the primary aspects was the schools lessening enrollment numbers and funding difficulties. In May of 2024 MMC announced it had begun the process of merging with Northeastern University which has its primary campus in Boston. In terms of the merger, Northeastern will acquire all fiscal responsibilities that belong to MMC, including their current log of $58 million in liabilities.
A representative of MMC stated that “MMC reached an agreement with the U.S. Attorney’s Office for the Southern District of New York and has paid the settlement.” Additionally, the representative stated that the settlement will not affect the merger. With the merger still pending approval from the DOE, students continue to wait for updates.
