Test Prep Company Accused of Fraud

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The Princeton Review - one of the nation's most-popular test prep organizations - is being accused of taking millions of dollars to tutor poor children, but never actually tutoring them.

The United States and New York State are suing the Princeton Review in Federal Court for fraud. Prosecutors said that the company took millions of dollars of federal money to tutor underprivileged children, but instead of actually tutoring the kids, prosecutors said the company just pocketed the money.

Princeton Review took $35-$75 per student in its contract with the New York City Department of Education to tutor poor children after school. But according to the lawsuit, Princeton Review began billing the city for students who never actually showed up for class. In one instance, Princeton Review billed the city for tutoring 74 students on New Year's Day, when schools were dark.