Education

SAN FRANCISCO -- Attorney General Kamala D. Harris today filed a lawsuit against Corinthian Colleges, Inc. (CCI) and its subsidiaries that operate Everest, Heald and WyoTech colleges for false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.

The complaint alleges that CCI intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs. CCI deployed these advertisements through persistent internet, telemarketing and television ad campaigns. The complaint further alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers.

“The predatory scheme devised by executives at Corinthian Colleges, Inc. is unconscionable. Designed to rake in profits and mislead investors, they targeted some of our state’s most particularly vulnerable people—including low income, single mothers and veterans returning from combat,” Attorney General Harris said. “My office will continue our investigation into the for-profit college industry and will hold accountable those responsible for these illegal, exploitative practices.”

According to Harris’ complaint, CCI’s predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for future.”

According to the complaint, CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame. The complaint further alleges that CCI runs millions of online and mobile ads offering ultrasound, x-ray, radiology, and dialysis technician programs at their California campuses—when, in fact, CCI does not offer those programs. CCI’s call center agents are disciplined if they tell callers that CCI does not offer these programs. Additionally, according to the complaint, CCI includes official Army, Navy, Air Force, Marine Corps, and Coast Guard seals in mailings and on web sites without authorization and in violation of California law.

The complaint alleges that CCI committed securities fraud by reporting a nationwide job placement rate of 68.1% in presentations to investors, when senior executives knew this percentage was false. The complaint describes internal audits emailed to CCI executives that show job placement data error rates between 53% and 70%. The complaint references an email from a CCI executive which explains that in 2011, two Everest College campuses (Hayward and San Francisco) paid a temporary employment agency “to place students to meet the accreditation deadline and minimum placement %.” The complaint also states that CCI double-counted job placements and failed to maintain required records of reported job placements.

According to a recent CCI securities filing, the average tuition for a CCI associate’s degree is $40,000 and the average tuition for an online CCI associate’s degree is $34,000.  The average tuition for CCI’s non-degree healthcare programs is $17,000.

CCI is based in Santa Ana and currently operates 24 Everest, Heald and WyoTech campuses in California, 111 total campuses in North America and three online programs. Out of the 81,000 students who attend CCI colleges, approximately 27,000 (33%) are in California.

CCI is a publicly traded corporation with assets of over $1 billion. Federal funds account for almost all of CCI’s annual revenue.

In July 2013, Attorney General Harris filed a separate lawsuit in Sacramento Superior Court to enforce an investigative subpoena against Bridgepoint Education Inc., operator of Ashford University, as part of an investigation of that company’s practices.

Current or former CCI students who wish to file a complaint can contact the Attorney General’s Office at: http://oag.ca.gov/contact/consumer-complaint-against-business-or-company

Resources for current or former CCI students are available at: oag.ca.gov

A copy of the complaint is attached to the electronic version of this release at: http://oag.ca.gov/news

SAN FRANCISCO -- Attorney General Kamala D. Harris today issued the following statement on the California Endowment’s announcement that part of its $50 million “Sons & Brothers” campaign will fund multiple programs focused on reducing truancy and chronic absence in California elementary schools:

“California’s elementary school truancy crisis is hurting our children, the economy and public safety,”  Attorney General Harris said.  “The California Endowment’s investment is the kind of leadership California needs to combat this problem and build a stronger, more secure state. Everyone has a role in getting our youngest students to class, and I thank the Endowment for tackling this important issue head on.”

Today, the California Endowment announced a commitment of $50 million over the next 7 years which will focus on chronic absence, 3rd grade reading levels, high school graduation and postsecondary certification. Among other goals, the campaign aims to improve attendance by 30% in partnering schools.

Last week, Attorney General Harris released a report, In School +On Track, which examines the state’s elementary school truancy crisis and provides solutions to fight the problem.  According to the report, students who are chronically absent before 3rd grade score 60% lower on 3rd grade reading level tests. Studies show that 1 in 6 students who are unable to read proficiently by 3rd grade will fail to graduate from high school on time which costs the state billions of dollars. The Attorney General’s report called on funders to focus their efforts on improving 3rd grade reading levels by financing new programs to improve elementary school attendance.

More information on the California Endowment’s campaign can be found here: http://www.calendow.org/sonsandbrothers.aspx

Attorney General Harris’ report can be found here: http://oag.ca.gov/truancy

LOS ANGELES – California Attorney General Kamala D. Harris today unveiled the first state-wide statistics on California’s truancy crisis which reveal that, last year alone, 1 million elementary school students were truant and 250,000 elementary school students missed 18 or more school days at a cost of $1.4 billion in lost funds to California school districts.

These findings are part of a report, In School and On Track, issued today by Attorney General Harris in Los Angeles where statewide education, public policy and law enforcement leaders were convened to discuss this crisis and identify concrete solutions.

“The California Constitution guarantees every child the right to an education, yet we are failing our youngest children, as early as kindergarten,” Attorney General Harris said. “These are children as young as five years old who are out of school, falling behind, and too many of them never catch up. This crisis is not only crippling for our economy, it is a basic threat to public safety.  It’s time for accountability and to craft real solutions at every level - from parents to school districts, to law enforcement - to solve this problem.”

According to the report, elementary school truancy is at the root of the state’s chronic criminal justice problems. According to the report, missing large amounts of school is one of the strongest predictors of dropping-out, even more so than suspensions or test scores. Annually, dropouts cost California taxpayers an estimated $46.4 billion in incarceration, lost productivity and lost taxes.

Information broken down by school district and county is available here: https://oag.ca.gov/truancy and: https://oag.ca.gov/truancy/ch1

Key Findings from In School and On Track:

• In California last year, 1 million elementary school students were truant and 250,000 students missed 18 or more school days.
• In some California elementary schools, 92% of students were truant last year.
• California school districts are losing $1.4 billion in funding due to truant students.

Solutions from In School and On Track:

• California must create a statewide system to collect student attendance records.
• School districts must improve the way truant students are monitored.
• School administrators must meet with parents or guardians immediately when a child is truant.
• Law enforcement must focus on early, positive intervention to empower parents and students.
• Parents must be held accountable, including prosecution in the most severe cases.

Attorney General Harris was joined at the symposium by: Los Angeles District Attorney Jackie Lacey, California Superintendent of Public Instruction Tom Torlakson, Compton City Mayor Aja Brown, Dr. Robert Ross, President & CEO of the California Endowment, Tom Saenz, President and General Counsel of the Mexican American Legal Defense and Educational Fund and Hedy Chang, Director of Attendance Works.

The California Attorney General’s office will issue this report annually.  The office’s Civil Rights Enforcement Section spent 7 months researching this crisis and convening stakeholders to devise solutions.

As the District Attorney of San Francisco, Attorney General Harris started a citywide truancy initiative in 2006.  In the course of investigating factors contributing to the city’s violent crime rate, she found that 94% of San Francisco homicide victims under age 25 were high school dropouts.  Then-District Attorney Harris formed a partnership with the school district to inform parents that they had a legal duty to ensure that their children attended school, provide parents of chronically truant students with wrap-around services and school-based mediation, and prosecute parents in the most severe cases where other interventions did not work.

Over a two-year period, then-District Attorney Harris’s initiative reduced truancy among elementary students in San Francisco by 23%, according to the San Francisco Unified School District.  The initiative also served as a model for SB 1317 (Leno), which defined “chronic truancy” for the first time under state law and established the initiative’s model of combining meaningful services with smart sanctions in the California Penal Code.  The bill was sponsored by then-District Attorney Harris and was enacted in law in 2010.

The report is available in its entirety online at: https://oag.ca.gov/truancy

SAN FRANCISCO -- Attorney General Kamala D. Harris today filed a friend-of-the-court brief in the U.S. Supreme Court affirming the critical importance of diversity in higher education.

Attorney General Harris’ brief urges the U.S. Supreme Court to affirm an appellate court decision in Fisher v. University of Texas, a case that involves race-conscious admissions at the University of Texas. The brief argues that the considerable educational and societal benefits of a diverse student body strongly support the Court reaffirming its acknowledgment under the 14th Amendment that the U.S. Constitution affords educators the flexibility to consider race, among many factors, in admission decisions.

Oral arguments for Fisher v. University of Texas will be heard on October 10.

“A diverse student body better prepares students for an increasingly diverse workforce and society, and better prepares them as professionals. Moreover, it has been shown that because of the “resegregation” of American society, many students enter college with limited precollege exposure to people of different races, cultures, and ethnicities. Interaction during college years with students of different races and cultures can help disrupt the cycle of resegregation and lead to more positive cross-racial interaction and understanding,” the amicus brief states.

A copy of the brief is attached to the online version of this release at www.oag.ca.gov

During this National Week of Action on School Discipline, I encourage local and state policymakers to consider the range of alternatives to suspension and expulsion. We need to hold kids accountable and help them learn from their mistakes, but also keep them in school and on course to graduate. As a career prosecutor, I know that frequent use of out-of-school suspension for non-violent offenses can set the stage for the type of chronic truancy that leads to students dropping out of school and becoming victims of crime.

That is why I am pleased to recognize this National Week of Action on School Discipline from October 1-8 in California and across the United States.

SAN FRANCISCO – Attorney General Kamala D. Harris hosted a Smart on Crime Policy Summit today with a veteran, bi-partisan group of leaders from across the state. Ten work groups – focusing on topics ranging from policing to victims’ rights – prepared briefing papers for Attorney General Harris. The papers, dealing with critical issues facing California, were the focus of the summit at U.C. Hastings College of the Law.

The 10 groups drew insights from best practices of other attorneys general, law enforcement leaders, universities, foundations, think tanks and others at the forefront of research, ideas and innovation. More information about the work groups, and the briefing papers, can be found at: www.smartoncrimepolicy.org.

The honorary co-chairs are William Bratton, former Los Angeles Chief of Police; Warren Christopher, former U.S. Secretary of State; Dolores Huerta, co-founder of the United Farm Workers; State Sen. Mark Leno (D-San Francisco); Constance L. Rice, co-director of The Advancement Project; George Shultz, former U.S. Secretary of State; and Kathleen Sullivan, professor and former dean of Stanford Law School.

The following is a list of topic areas and chairs of the 10 work groups:

Civil Rights Enforcement
Bill Lann Lee, Shareholder, Lewis, Feinberg, Lee, Renaker & Jackson, P.C.

Education & Truancy
Carlos Garcia, Superintendent, San Francisco Unified School District
Laurene Powell, Co-founder & President of the Board, College Track

Environmental Enforcement
Rick Frank, Director, California Environmental Law & Policy Center, U.C. Davis School of Law
John Poyner, District Attorney, Colusa County

Organized Crime, Gangs and Gun Crime
Lee Baca, Sheriff, Los Angeles County
Charlie Beck, Chief of Police, Los Angeles Police Department
Rev. Jeff Carr, Chief of Staff, Mayor Antonio R. Villaraigosa, City of Los Angeles
Gilbert Otero, District Attorney, Imperial County
Mike Ramos, District Attorney, San Bernardino County
Jack Weiss, Managing Director & Head of Los Angeles Office, Kroll

Health
Paul Gallegos, District Attorney, Humboldt County
Jane Garcia, CEO, La Clincia de La Raza
Dr. Mitch Katz, Director, Los Angeles Public Health Department
Dr. Bob Ross, President & CEO, The California Endowment

Mortgage Fraud and Consumer Protection
Kelly Dermody, Partner, Lieff Cabraser Heimann & Bernstein
Dan Grunfeld, Co-Chair, Litigation Department, Kaye Scholer
Greg Totten, District Attorney, Ventura Country

Policing
Tony Batts, Chief of Police, Oakland Police Department
Ron Davis, Chief of Police, East Palo Alto Police Department
George Gascon, District Attorney, San Francisco
Bill Landsdowne, Chief of Police, San Diego Police Department

Reentry & Recidivism Reduction
Lee Baca, Sheriff, Los Angeles County
Bonnie Dumanis, District Attorney, San Diego County
Larry Morse, District Attorney, Merced County
Tim Silard, President, Rosenberg Foundation
Mimi Silbert, President & CEO, Delancey Street Foundation

Technology
Ed Berberian, District Attorney, Marin County
Jack Christin, Jr., Associate General Counsel, eBay/PayPal
David Drummond, Senior Vice President & Chief Legal Officer, Google
Fred Humphries, Managing Director, Microsoft
Bruce Ives, Vice President & Deputy General Counsel, Hewlett-Packard
Scott Forstall, Senior Vice President, iPhone Software, Apple
Mitchell Kapor, Founder, Lotus Development Corporation
Sheryl Sandberg, Chief Operating Officer, Facebook

Victims' Rights
Gary Lieberstein, District Attorney, Napa County
Nancy O’Malley, District Attorney, Alameda County
Esta Soler, Founder & President, Family Violence Prevention Fund

For additional information, please call the Attorney General’s press office at 510.622.4500.

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LOS ANGELES - Attorney General Edmund G. Brown Jr. today announced a half-million-dollar settlement with the operator of a sham nursing school in Los Angeles that created “the illusion it was training future nurses” by pretending to offer an accredited nursing program and tricking graduates into believing they had qualified to become registered nurses.

As many as 300 students paid $20,000 each to enroll and attend classes at RN Learning Center, which advertised its fast-track program for earning a bachelor of science degree in nursing in less than two years.

“By creating the illusion it was training future registered nurses,” Brown said, “the school destroyed the aspirations of hundreds of students who also lost thousands of dollars in wasted tuition. The school will shut its doors today and pay back its former students as fully as it can.”

In the settlement negotiated by Brown’s office on behalf of the Board of Registered Nursing, Junelou Chalico Enterina, owner and operator of RN Learning Center, which operated on Wilshire Boulevard in Los Angeles, agreed to close his business and pay victims restitution of $500,000. He also agreed never again to open a nursing school in California.

The board, which is the state agency that oversees the practice and education of nurses, believes no student of RN Learning Center was able to use her degree to qualify for the state’s nursing exam or become a registered nurse. However, the board is contacting every medical facility in the state to warn about unaccredited schools such as RN Learning Center.

The settlement today concludes a board investigation that began in early 2007. Despite purporting to be a nursing school, RN Learning Center never applied to the nursing board to obtain accreditation as a school of nursing. Three years ago, the board ordered the school to close. It also disciplined two licensed registered nurses associated with the school and posted a notice on its website warning prospective students that unaccredited schools were operating in California.

Despite the scrutiny, RN Learning Center continued to operate, targeting mostly Filipino-Americans who already worked in the health field. The school’s marketing materials promised the program would, “Advance Your Education. Increase Your Earnings. Secure Your Financial Future.” Just as they would in a real nursing school, students took classes in anatomy, microbiology and learned to do sutures. They traveled to the Philippines for a month of clinical study in hospitals and prisons, and attended classes at a foreign nursing school that also had not been approved by California’s board.

RN Learning Center kept the deception going by holding formal graduation ceremonies. About 50 of its students applied to the nursing board to take the National Council Licensing Examination, which qualifies nursing school graduates to become licensed registered nurses. The students submitted transcripts that were declared fraudulent, so they were unable to meet the eligibility requirements and were not allowed to take the licensing exam. Because RN Learning Center was unlicensed, none of the course work taken there can be counted toward completing a Bachelor of Science in Nursing.

One student, Faith, described how she applied to RN Learning Center because the class schedule allowed her to also work and juggle childcare. She attended classes for two years, driving 240 miles twice a week from Bakersfield to Los Angeles with her two children. When she raised questions, such as asking about the school’s lack of clinical training, the staff reassured her. “My children, ex-husband, brother, friends and everyone I worked with, can attest to my commitment and sacrifice I made to complete this program,” she said in a declaration. “We the students have lost a lot.”

If you were a nursing student of RN Learning Center, please contact the Attorney General’s Office at (213) 897-2000. For more information about the California Board of Registered Nursing, please see http://www.rn.ca.gov/

SAN FRANCISCO – Concluding an investigation into fundraising practices at California State University at Stanislaus, Attorney General Edmund G. Brown Jr. announced today that the CSU Stanislaus Foundation has agreed to improve oversight of the money it raises and spends for the school.

“We examined whether money given to a charitable foundation was handled appropriately, but found no violation of law,” Brown said. “However, the foundation board has agreed to make changes to improve oversight of its funds.”

Brown’s Charitable Trusts Section found that the foundation exercised inadequate oversight of its $20 million in assets, but found no misuse of its funds and no violations of state law.

In April, at the request of state Senator Leland Yee of San Francisco, Brown agreed to investigate the foundation, including whether it was spending its money for the benefit of the campus as it promises its donors, the university and the public. Brown also investigated the refusal of CSU Stanislaus to turn over records of an appearance by Sarah Palin at a university fundraising event.

Subsequently, Californians Aware, a non-profit watchdog group, filed a civil lawsuit against both the university and the foundation to compel disclosure, and Brown suspended his investigation pending resolution of the lawsuit.

Brown’s audit showed that the foundation’s accounting procedures were inadequate, it failed to understand fully its duties and responsibilities under the law – including basic charitable trust concepts – and it failed to implement its own auditor’s recommendation to prepare a budget for all fundraising events. Recently, the foundation has been working with an independent auditor to rectify these lapses.

The foundation’s board of directors agreed to:

• Participate in directors’ training on management of charitable organizations and the fiduciary duties of charitable boards of directors.
• Consider immediately all recommendations made by its independent auditor.
• Ensure that its relationships with all outside fundraisers comply with California law.
• Ensure that it consistently follows all its fiscal and governance policies.

The Attorney General’s Charitable Trusts Section oversees charities to make sure they comply with the law and their articles of incorporation. The Attorney General is authorized to bring legal actions against charities if they misuse funds under their control or otherwise fail to follow the law.

The closing letter to CSU Stanislaus is attached.

PLEASANTON – Attorney General Edmund G. Brown Jr. and the City of Pleasanton have reached a precedent-setting agreement ending Pleasanton’s restrictions on new housing and opening the way for jobs and new housing to be located close to each other.

“This agreement clears the way for new jobs, less congested freeways and cleaner air,” Brown said. “It requires homes to be built closer to where people work to reduce long commutes and create a more neighborly urban environment.”

Tuesday night, the Pleasanton City Council voted unanimously to accept the agreement.

In 2006, the nonprofit group Urban Habitat filed a lawsuit challenging Pleasanton’s housing cap, which placed a permanent limit of 29,000 housing units in the city. Brown intervened in the case in 2009 and argued the housing cap violated state law by promoting urban sprawl and clogging the freeways with unnecessarily long commutes.

In March 2010, the Alameda County Superior Court ruled in the Attorney General’s favor.

In the settlement approved last night, Pleasanton agreed to remove restrictions on new housing and to accommodate affordable housing adjacent to the city’s BART station. Along with creating jobs and fulfilling the city’s share of regional housing, the new development will enable workers to live within walking distance of a major transit hub.

While Pleasanton has been a magnet for new employment, housing has lagged far behind the number of new jobs, despite ample land for development, including property adjacent to the Pleasanton BART station. In the last decade, the number of new jobs nearly doubled – from 31,683 to more than 58,000. Unable to find affordable housing within the city, some workers were forced to commute two hours per day or more. One study found that 79 percent of workers lived outside of Pleasanton.

Brown has taken an active role in encouraging local governments and businesses to help the state reach its greenhouse gas reduction goals. He has commented on several dozen environmental review documents, including those created for the General Plans of cities and the regional transportation plans of counties, as well as for projects related to oil refineries, cement plants, and dairy expansions. Brown has also reached path-breaking settlements with the County of San Bernardino and the City of Stockton, which required them to develop plans to ensure sustainable growth with a reduced carbon footprint.